In releasing its latest operating data, Singapore Airlines (SIA), co-owner of Gurgaon-based Vistara Airlines, revealed that it carried 600,000 passengers in December, nearly double the number of passengers it transported a month ago.
That’s ten times more than the 64,600 it carried in December 2020, and an indication that the struggling airline industry in the region is beginning to recover from the COVID-19 pandemic.
The higher number is also partly due to the year-end holiday season in Singapore as well as the success of the VTL (Vaccinated Traffic Lane) travel program introduced by the city-state. As of November 26 last year, a total of 24 countries, including India, Sri Lanka and the Maldives, were covered by Singapore’s VTL program.
Visitors from Qatar, Saudi Arabia and the United Arab Emirates (UAE) were to be added as VTL countries from December 6, but this arrangement has been discontinued due to the emergence of the heavily mutated Omicron COVID variant and more transferable. Since then, no other countries have been added.
Also due to the Omicron variant, the Singaporean authorities announced on December 22 that they would suspend the sale of VTL air tickets until January 20 and half of the quota for visitor arrivals under the VTL program. . It had previously set a daily limit of 10,000 travelers from VTL countries who could enter Singapore.
The SIA, in its statement accompanying the release of its December 2021 operating statistics, acknowledged this quota reduction. The carrier said it “will continue to be agile and operate its network in accordance with prevailing market conditions and regulations.” He also added that he expects passenger capacity for January and February 2022 to be around 47% and 45% of pre-COVID levels, respectively.
This of course assumes that its customers do not cancel or change their plans due to travel inconvenience, as some countries impose stricter border controls, including more testing and quarantines. If SIA manages to reach the expected number of passengers for this month and next, the airline will continue to improve its performance.
At the end of December 2021, SIA’s passenger network covered 85 destinations including Singapore, up 13 compared to the end of the previous month.
Although it continues to lose money, albeit at a slower pace than at the height of the pandemic-imposed border closures, SIA is certainly in better financial shape than its regional peers.
Backed by Singaporean government investment firm Temasek, it has successfully raised more than $16 billion since the start of the pandemic and last week sold another $600 million worth of bonds at a very attractive yield of 3.493% , nearly a full percentage point lower than the average yield at issuance for global airline tickets sold in 2021, according to Bloomberg data.
Many regional carriers that lack such government support are barely out of bankruptcy court or are still in the midst of such proceedings.
On the last day of 2021, Philippine Airlines said it emerged from bankruptcy after a US court approved its plan to reduce up to $2 billion in debt. It also secured $505 million in additional capital from its largest shareholder, billionaire Lucio Tan through its investment holdings.
Indonesian Garuda is still in the midst of legal restructuring. Just last week, an Indonesian court extended Garuda’s debt restructuring deadline by 60 days to give the airline more time to verify all claims. He is asking creditors to take a $6.1 billion haircut to reduce debts to $3.7 billion in a legal proceeding.
Thai Airways has currently been run by bankruptcy administrators since filing for protection in May 2020 after dramatically defaulting on more than $3 billion in debt. The airline was $9.8 billion in debt at the height of the COVID pandemic. It is trying to reduce its day-to-day operating costs and expenses, reduce its activities, increase its income and seek new sources of funding.
Air India, after bleeding $3 million a day of taxpayers’ money for most of the past decade, has finally been offloaded to Tata Sons and the transfer is expected to be completed by the end of January. The steel-salt conglomerate paid about $2.4 billion to take over the government-owned airline, which includes assuming $2 billion in debt.
AirAsia, which has managed to stay afloat by cutting costs, raising funds, disposing of assets and reorganizing payments to its creditors, has also sought various ways to diversify its sources of income. They now have a “super-app” and are dedicated to carpooling, food delivery, online grocery shopping and digital payments. It has also strengthened its logistical and market capabilities to acquire more cargo aircraft. He sold his stake in AirAsia India to raise capital and now owns around 16% of the airline, down from 49% before the pandemic.