Singapore Airlines Cuts Cash Burn to As Little as $75 Million a Month: CFO

FILE PHOTO: A flight crew passes a Singapore Airlines logo at Singapore’s Changi Airport January 5, 2016. REUTERS/Edgar Su

Singapore Airlines Ltd has reduced its cash burn to about S$100 million ($75 million) to S$150 million a month, from as much as S$350 million last year, as it weathers a plunge in travel demand, its chief financial officer said on Thursday.

Cash burn should remain “reasonably stable” at current levels if demand conditions stay similar, Stephen Barnes told analysts and reporters. Singapore Airlines shares were trading 2.3% higher at 0340 GMT on Thursday.

The airline posted a record annual loss of S$4.27 billion on Wednesday and said it would issue S$6.2 billion of convertible bonds underwritten by its majority shareholder, state investor Temasek Holdings.

The funds will help ride out the coronavirus crisis given an uncertain recovery profile.

The carrier maintained its February forecast for S$4 billion of capital spending in the financial year ending March 31. It said it planned a net addition of 19 planes to its fleet plus eight Boeing Co 737 MAX jets when regulators allow.

Executive Vice President Finance And Strategy Tan Kai Ping, who is due to replace Barnes as chief financial officer on May 31, said continuing to take delivery of newer models like A350s and 787s would allow the airline to reduce fuel and maintenance costs.

Ten of the 19 planes are leased Airbus SE A321neos for low-cost carrier Scoot. The budget carrier’s CEO, Campbell Wilson, said negotiations with lessors BOC Aviation and SMBC to delay delivery had been unsuccessful.

($1=1.3330 Singapore dollars)

Reporting by Jamie Freed in Sydney; Editing by Clarence Fernandez and Stephen Coates; Reuters


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