By Chan Sue Ling
May 14 (Bloomberg) — Singapore Airlines Ltd. posted its first operating loss in six years after the global recession caused an 18 percent plunge in passenger numbers.
The world’s second-biggest carrier by market value had an operating loss of S$28 million ($19 million) in the three months ended March compared with an operating profit of S$468 million a year earlier. Sales dropped 19 percent to S$3.32 billion, the airline said in a statement today.
Chief Executive Officer Chew Choon Seng has cut work days, frozen wages and begun taking planes out of service to battle the slowdown. Japan Airlines Corp., Cathay Pacific Airways Ltd. and British Airways Plc have also all posted losses as business and leisure travelers curb flying amid the economic slump.
?Nothing good is going to come out from the aviation space right now,? said Jim Eckes, managing director of industry adviser Indoswiss Aviation. ?It?s a bad quarter for everyone. Airlines may need to ground more planes, delay aircraft deliveries and further cut staff costs.?
Fourth-quarter net income sank 92 percent to S$41.9 million, or 3.5 cents a share, from S$527.5 million, or 44.1 cents, a year earlier.
?In the near term, promotional pricing and reduced business travel will keep revenue under pressure,? the carrier said in the statement. Savings from the drop in fuel prices ?will be offset by progressive settlement of fuel hedges contracted at higher prices.?