SIA’s problems are the industry’s as well

SIA A380 in air.jpg



Someone said the other day that if Singapore Airlines is reeling from the economic crisis, the prognosis must really be bad for the airline industry.

That came true today when SIA reported a net loss of S$307 million ($212 million) for its fiscal first quarter. This was its first loss since the 2003 SARS crisis almost six years ago. This time, the future looks a little bit bleaker.

SIA is suffering from the triple whammy of a collapse in the cargo market, the fall in demand for long-haul travel and company cost-cutting measures that resulted in a drop in business class travel.

It can manage its costs better than many other full-service airlines, and it is a bit more nimble in the way it can deploy capacity. This time, however, there are several economic conditions that are beyond its control.

The airline has warned that it could report a net loss for the full year if the adverse situation continues. That could be even worse news for the entire industry than it is for SIA itself.



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