by JORDAN CHONG  

December 1st 2020

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MAY

The financial red ink continued to flow this month, led by the Asia-Pacific’s two most prominent carriers, Cathay Pacific Group and SIA group’s three airlines. Read More » Mid-month, SIA reported the first full-year loss in its 48-year history after a disastrous final three months of its fiscal year. To illustrate the carnage, the net loss of S$721 million (US$537 million) for the three months to March 31 was more than three times the full-year net loss of S$212 million.

“Gains from the first nine months were wiped out by the decline in the final quarter from global travel restrictions and border controls which led to a collapse in demand for air travel,” SIA senior vice president for finance, Stephen Barnes, said.

The news was just as bleak in Hong Kong where Cathay Pacific announced it had lost HK$4.5 billion (US$581 million) in the four months to April, and added there was no sign of a meaningful recovery ahead. It was operating 3% of its normal capacity in May.

Both Cathay Pacific and SIA began a review of their operations aimed at being competitive when the market recovered.

Thailand’s prime minister, Prayuth Chan-o-cha, said Thai Airways International (THAI) would undergo a corporate restructuring process via the country’s Central Bankruptcy Court.

While the government had considered three options for the loss-making flag carrier – providing financial support, letting the airline collapse or putting THAI through a bankruptcy court-led restructuring – General Chan-o-cha said there were other demands for government funds that had higher priority. A former successful president, Piyasvasti Amranand, returned to THAI as a board director along with three other new directors.

Korean Air said it would raise 2.2 trillion won (US$1.8 billion) to boost liquidity, made up of 1.1 trillion won from a share issue and 1.2 trillion won in government aid through the Korea Development Bank and The Export-Import Bank of Korea. “Korean Air will continue to carry out self-rescue measures to overcome the dismal business environment due to COVID-19,” the airline said.

Indian airlines resumed domestic flights after the government lifted a suspension that had been in place since late March. However, the Ministry of Civil Aviation placed a 33% cap on capacity.

IATA warned ticket prices could jump by 50% if airlines were forced to keep social distancing rules such as blocking the middle seat in place. Figures from the airline lobby group showed only four airlines out of a sample of 122 carriers would have made money under such rules.

Rather than empty middle seats, IATA supported mandatory face-coverings for passengers and masks for crew among a package of measures to reduce the risk of contracting COVID-19 on board an aircraft.