Singapore Airlines

[Ben]

I am sure SQ has analyze and re analyze the different scenarios before going ahead to launch all these revenue generating activities. Doing all these at these times need extra careful considerations and also extra layer of approval. If they are not confident that it will contribute to the bottom line, I guess they will not go ahead. Many airlines in other countries are also doing similar things. And based on the take up rate for the dinning experience, which I understood that it was sold out in less than 30 minutes, it should help their bottom line, though insignificant. A sold-out case in any scenarios simulation should be the best outcome they could hope for.

Not vested in SQ.

[¯|_(ツ)_/¯]

me too.

When I heard about the sold-out news, my initial thoughts is exactly the same as you.
However, after 2nd level thinking, I'm curious to see whether SQ will make another dash for cash or not?

As for the non-stop flight, questions is rather simple.
Will SQ maintain social distancing?
If yes, how could it operate profitably?

I mean, without social distancing, it's definitely profitable.
With social distancing?

Your guess is as good as mine.

So, if SQ operates these non-stop flight at a loss, there is a very good reason.
Obviously, it's not sustainable, unless SQ think that mid to longer term, it does not need to maintain the social distancing and hence, gain back its profit.

At the mean time, it's flying at a loss for a good reason.
And, of course, your guess is as good as mine too.

---

Other than cash burn out rate, SQ fuel hedge will be worth monitor too.

Stay home and stay safe, everyone.

[Ben]

The non stop flight to New York, if I remember correctly, is primarily for airfreight of cargo and at the same time to pick up transit passengers to New York. Not really a bad move, since there is a surge in demand for cargo air freighting. So logically, I would assume that SQ would have collected a certain volume of cargo freight before launching the flight, and any transit passengers they manage to pick up along the way would be an added bonus.

Wish them success!

[¯|_(ツ)_/¯]

Yes. Singapore success depends on SQ abilities to fly (profitable or not is secondary).

The various activities that SQ is trying to generate revenue are good initiatives and is definitely commemorable.

The balance is of course, controlling cash outflow and preventing a burn-out.

The winter likely to be longer than what we wanted.
Every penny saved is every penny earned.

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

Lots of bloggers and youtuber shared on SQ restaurant and it's definitely successful executed.
Out of many great posts, lets me choose one which is energetic and refreshing for our valuebuddies:
0:50 starting of economy food
2:00 start of business class


I couldn't help noticing from the above picture and also in the video that the entire row is only occupied by 2 person.

Enjoy and like what a comment says, SQ should try to arrange for the dining experience with overnight stay - just like a hotel.

SQ - game enough? 
just need to balance revenue with profits/cash burn-rate.

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

SQ - H1 2020 Result as at 30 Sep 2020
Rev $1.6b (vs 8.3b)
Gross Loss $1.8b (vs +0.4b)
Net Loss $3.4b (vs +0.2b)
Div 0  (vs 8 cents)
https://links.sgx.com/FileOpen/nr-q2fy20...eID=638274

As a result of capacity cuts and lower fuel prices, fuel cost before heding fell $2,207 million (-91%) yoy.
However, this was partially offset by fuel hedging losses during the first half, compared to a gain last year.
As a result, fuel cost post hedging was $1,973 million lower yoy.

SQ reported a lost of S$1.12b for Q1.
Now, SQ reported a lost of S$3.47b for H1.
Simple calculation says that SQ lost S$2.34b in Q2.

Take note that these losses had already cushioned by cargo taking imporovement as SQ maximised freighter utilisation and deployed passenger planes on cargo missions to meet greater demand as global supply chains were being restored.
As fuel prices and consumption remain low and not expected to improve soon, SQ recognised mark-to-market losses of S$563 million on ineffective fuel hedges in H1. 
It has paused fuel hedging since March 2020.

No mentioned on the successful launch of SQ resturants.

My take is SQ wanted to increase it's revenue.
However, it still need to watch it's bottomline carefully.
While stretching beyond it's mean to go for the topline, conserving cash should be the priority.

It should refrains itself for doing stuffs that's not commercially viable and watch it's cash burn-rate carefully.

Stay home and stay safe, everyone.

[weijian]

I see the portion of SIA trying out SQ restaurants etc, while is an attempt to increase revenue, but more importantly the exercise itself is one to stay relevant. Consider it practice for their staff to stay sharp of their hospitality attitude and also publicity and branding exercise to occupy a mindshare in consumers' mind.

[specuvestor]

According to UBS, fuel hedging ineffectiveness reduced from S$464m in Q1FY21 to S$99m in Q2FY21.

SQ expect to operate 16% of passenger capacity end Dec 2020 and 50% by end 2021. I'm assuming this includes safe distancing so 50% is not the same as 50% of yesteryears

I would think their fuel hedge losses will be tapering off QoQ as they would not be hedging much for 2H20, though there's still possibly residual of long dated hedges

Cut 4,300 positions:
1. 2,400 from Singapore and Oversea stations
2. 1,900 from job freeze, early retirement and voluntary release
Goh Choon Phong: "The next few weeks will be some of the toughest in the history of the SIA Group as some of our friends and colleagues leave the company. We will conduct this process in a fair and respectful manner, and do our best to ensure that they receive all the necessary support during this very trying time."
https://links.sgx.com/FileOpen/NE-1420.a...eID=631225

I try not to read in between the line but I couldn't stop myself for imagining significant losses from fuel hedge.

I hope I am wrong.

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

SQ - Transcript

Burn rate
Sort of in the May, June, July period, our cash burn was in the region of $350 million dollars monthly and the indication that we gave most recently is that our cash burn is $300 million and reducing.

Fuel hedge
Mr Paul Yong, Mr Paul Yong,DBS: But what is underpinning the fuel hedging ineffectiveness charge? Like, you know, we have to assume a certain capacity beyond December in order to take that S$560 million charge for the surcharge.

Mr Stephen Barnes: Okay, so by way of guidance, we Mr Stephen Barnes assumed recovery in capacity takes us to close to 50% by the end of calendar 2021.

Mr Goh Choon Phong: I just want to add that of cour Mr Goh Choon Phong se, as you correctly pointed out, in order to arrive at the number for fuel hedging effectiveness, we need to have some underlying assumptions. But that is not to say that that is the way we will operate, because of how dynamic the situation is out there. You can be rest assured that we will seize all opportunities of course, but we got to be very nimble.

A380 Restaurant
Mr Tan Gek Leng, Shin Min Daily News: Mr Tan Gek Leng, Shin Min Daily News: Hi, this is Gek Leng from Shin Min. I would like to ask, because the Discover Your SIA, especially the Restaurant A380 and the Inside SIA, has been very popular. Is there any decision to make it a more constant offering, or a more regular offering?

Mr Lee Lik Hsin: This is Lik Hsin again. As you kno Mr Lee Lik Hsin: w, we recently concluded our Restaurant A380 series and we are now putting all of our efforts into the next series of activities, which is the Inside SIA experience, an inside look at our training centre. I think at this time, we would want to concentrate on making that as big of a success as our Restaurant A380, before we make any further considerations.

Addition MCB
Ms Tay Peck Gek, The Business Times: Ms Tay Peck Gek, The Business Times: Good morning, this is Peck Gek from The Business Times. Given your current liquidity, how long do you think you will last?
Mr Stephen Barnes: So, we currently expect that we will need to make a decision relating to the MCBs towards the end of the first calendar quarter. So, I think that is really the indicator in terms of the expected liquidity.
https://links.sgx.com/FileOpen/transcrip...eID=638681

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

Singapore Airlines Limited (the Company) refers to its announcements dated 12 November 2020 and 13 November 2020 in relation to a proposed issue of convertible bonds (the Convertible Bonds). The Company wishes to announce that it had on 30 November 2020, received the in-principle approval of the Singapore Exchange Securities Trading Limited (the SGX-ST) for the admission to the Official List of the SGX-ST.
https://links.sgx.com/FileOpen/AIP%20Ann...eID=641010

Stay home and stay safe, everyone.