Singapore Air goes through half of cash raised in two months

Singapore Airlines Ltd. has burned through half of the S$8.8 billion ($6.4 billion) it raised through share sales in just two months, highlighting how carriers’ expenses keep incurring even as planes are grounded.

Of the S$4.4 billion spent since mid-June, S$1.1 billion was used for operating expenses, maturing fuel-hedging trades and ticket refunds from canceled flights due to the coronavirus pandemic, the airline said Wednesday. About S$900 million was spent to service debt and S$200 million to buy aircraft.

Singapore Airlines raised the funds in June after the outbreak and resulting border restrictions decimated travel demand. The airline industry is unlikely to recover fully before 2024, the International Air Transport Association said last month.

The airline also used the proceeds to repay a bridge-loan facility of about S$2 billion that it had taken to cover expenses from March until the fundraising was completed.

The proceeds spent during the two months to Aug. 14 are almost equivalent to the combined net losses made by Singapore Airlines, Cathay Pacific Airways Ltd. and Qantas Airways Ltd. in the first half. To curb costs, the Singaporean carrier has slashed salaries and put staff on unpaid leave as it operates at less than 10% of capacity.

Singapore Airlines posted a first-half loss of S$1.85 billion as the pandemic wiped out passenger traffic. Cathay Pacific lost HK$9.9 billion ($1.3 billion) and Qantas A$1.96 billion ($1.4 billion).