Singapore continues to lead the global business community as one the world’s preferred destination for enterprises which set their sights towards entering or growing in the Asia Pacific market. However, the country, whose GDP relies heavily on services (70.38% in 2019) has seen the cancellation of several major events in the city state earlier this month; these include the Shangri-La Dialogue, an event between military leaders, diplomats and weapons industry, and the World Economic Forum.
A struggling industry
Among the hardest hit sectors in the country is the aviation industry which saw the closure of Changi International Airport Terminals 1 and 3. Challenges from the COVID-19 pandemic continue to impact the industry, including further delays in the long-planned travel bubble with Hong Kong. Bookings after 26 May will be handled as non-travel bubble flights.
Singapore Airlines has been in the red for two consecutive years, gathering a net loss of 4.27 Billion SGD in 12 months ending March 2021 compared to a 212 million SGD net loss the year before. This came as a result of the reduction in passenger traffic and but pushed by growth of the cargo business due to the pandemic. Following ground expenditure, fuel price reduction and prospective hedging on fuel stocks which helped cushion the impact on the bottom line, the airline has remained in a strong fiscal standing and has continued to attract investor interest in the financial markets through the issuance of bonds, notes and credit.
Light a the end of the tunnel
With the ongoing COVID-19 vaccination programmes in the region, the airline hopes to go back to around 30% of pre-pandemic passenger capacity. However, unpredictability of the virus, its variants and vaccine effectiveness and safety continue to loom in the horizon.
What do you think about the impacts of Covid 19 on the airline industry? Let us know in the comments below.