Singapore
Travel News
SARS sends Singapore Airlines
into loss
Issued: 30 July 2003
Singapore Airlines (SIA), one of the world's most profitable
airlines, reported its first quarterly loss at S$312 million
(US$177.8 million) as the SARS outbreak plummeted passenger
demand, but the result is less severe than anticipated.
The Singapore airlines
have suffered a great deal profit decline during April and May
when the Sars outbreak was at its height. Such a loss in income
also brought about the sack of 600 workers, wage cuts and forced
unpaid leave that have proved contentious with staffs.
Signs of recovery were
prominent in the first-quarter results, with the carrier having
posted a profit of S$58 million in June against a total loss of
S$370 million for April and May during which sales fell 35% to
S$1.65 billion. That compared with a net profit of S$478 million
in the same period a year ago. SIA reported full-year net earnings
of S$1.06 billion for last year.
Although the crisis of
SARS outbreak has reached its peak and passenger traffic to
Singapore has rebounded, the situation of the rest of the year is
still uncertain. Consequently, SIA appears determined to carry on
with cost-cutting to counter the threat posed by the advent of
budget airlines in the region.
Malaysia's Air Asia is
one of the rival budget airlines, regionally expanding its
network. SIA has raised the possibility of launching a budget
airline in response.
The awareness of the
concurrence in the region and the belt-tightening policy of SIA
are supported by the government because of fears that rival budget
airlines could take away business from Singapore's Changi Airport
and erode its status as the airline hub for Southeast Asia.
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