December 1st 2021

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September

In March last year, Singapore Airlines (SIA) announced an S$8.8 billion (US$6.6 billion) capital raising from the sale of new shares and mandatory convertible bonds. Read More » Fast forward 18 months and the Singapore flag carrier said in a regulatory filing to the Singapore Exchange (SGX) the S$8.8 million raised in 2020 had been completely used up on operating expenses, ticket refunds, aircraft and aircraft-related payments and debt repayments.

Nonetheless, SIA’s balance sheet was still being buoyed by S$21.6 billion in fresh liquidity raised since April last year, including S$6.2 billion from an additional rights issue last June. The exhausting of the funds raised in 2020 highlighted how restrictive international air travel has been during the pandemic.

Another example of Asia-Pacific industry strife was Cathay Pacific, which this month cut its capacity guidance for the rest of the year as “operational and passenger travel restrictions” continued to constrain its ability to operate more flights. The Hong Kong-based carrier predicted capacity would remain at 13% of pre-COVID-19 levels for the rest of the year, less than half its earlier forecast of 30% for the final quarter of 2021.

It was revealed this month Korean Air (KAL) had withdrawn as a member of the Association of Asia Pacific Airlines (AAPA) a couple of months earlier. A KAL spokesperson said the SkyTeam alliance member decided to withdraw from the AAPA following a review of the business.

In IATA news, the airline lobby group announced Philip Goh as its new regional vice president for the Asia-Pacific, succeeding Conrad Clifford. Goh was most recently SIA’s regional vice president for Southwest Pacific. On July 1, Clifford took up the new role of IATA’s deputy director general.

There was some positive news about the reopening of air routes this month, including the start of quarantine-free flights between Germany and Singapore for fully vaccinated travellers. Another encouraging initiative was the reopening of popular tourist destination, Langkawi in Malaysia, to fully vaccinated domestic travellers.

In other developments, Philippine Airlines (PAL) filed for Chapter 11 bankruptcy protection in the U.S. It had reached agreements with a majority of lessors, lenders and other creditors for US$2 billion in payment reductions and other changes in a permanent restructuring of the balance sheet, it said. There also would be a US$505 million capital injection into the carrier through new debt and equity funding from existing shareholders and domestic commercial banks providing sufficient liquidity during recovery, PAL said. As part of its restructuring, PAL’s 95 aircraft fleet would be cut by 25%.

Elsewhere in the region, regulators in Malaysia and Singapore cleared the 737 MAX to resume commercial flying.