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SIA faces its biggest challenge in Covid-19; investors will need a strong stomach

Jeffrey Tan
Jeffrey Tan5/22/2020 07:00 AM GMT+08  • 9 min read
SIA faces its biggest challenge in Covid-19; investors will need a strong stomach
Since its inception in 1972, Singapore Airlines (SIA) has weathered through all kinds of downturns that had im­pacted air travel. This included the Sept 11 terrorist attacks in 2001, the SARS epidemic in 2003 and the global finan­cia
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SINGAPORE (May 22): Since its inception in 1972, Singapore Airlines (SIA) has weathered through all kinds of downturns that had im­pacted air travel. This included the Sept 11 terrorist attacks in 2001, the SARS epidemic in 2003 and the global finan­cial crisis in 2008.

But the Covid-19 pandemic, which has shut down economies and grounded air travel worldwide, is proving to be the biggest chal­lenge ever faced by the national flag carrier.

Owing to the unprecedented collapse in air travel since March, SIA’s revenue tumbled 21.9% y-o-y to $3.18 billion in the fourth quarter ended March 31, from $4.08 billion in the same peri­od a year ago. The airline was also caught in an over-hedged position, no thanks to the plunge in crude oil prices. SIA was forced to record a fuel hedging ineffectiveness of $709.8 million.

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