Singapore Airlines (SIA) Group has reported access to S$21.6 billion ($16.2 billion) “to emerge from the crisis” after successfully raising approximately S$13.3 billion since the beginning of the Covid pandemic, with another S$8.3 billion in additional optional financing already secured if needed.

Strong cargo revenues helped SIA narrow its third-quarter operating loss to S$331 million ($248 million), improved from an operating loss of S$826 million in the second quarter, but reversing a previous-year S$449 million operating profit.

The group posted a third-quarter net loss of S$142 million, compared with a net profit of S$315 million in the previous year.

The group’s airlines — comprising SIA, regional unit Silk Air, and low-cost subsidiary Scoot — carried just 195,000 passengers over the three months ended 31 December, down 98% year on year. Group traffic, as measured in RPKs, was down 98% on a capacity cut of 86%.

The bright spot in SIA’s latest report was the cargo business, which recorded yield and load increases.

“In response to the continued strong demand for pharmaceutical and e-commerce shipments, and an uptick in general cargo demand, SIA added capacity by stepping up the frequency of passenger aircraft operating cargo-only flights and through the resumption of more passenger services. The utilisation of the freighter fleet was also maximised to deliver more cargo capacity,” SIA said.

On a nine-month basis, the SIA Group posted a S$2.2 billion operating loss, and S$3.6 billion in net losses.

Net losses included S$1.33 billion in impairment costs from the early retirement of 33 aircraft, including seven Airbus A380s, a S$127 million charge from the liquidation of Nok Scoot, and a $170 million write-down of goodwill recorded when SIA first gained control of Tiger Airways in 2014.

The group fleet consists of 185 passenger and cargo aircraft. The passenger network is currently supported by about 64 aircraft, said SIA. All seven freighters are fully utilised, and around 24 passenger aircraft are deployed on cargo-only services.

“We have parked 123 aircraft, including the 33 surplus aircraft that were impaired in the first half,” SIA noted.

As at 31 December 2020, the group’s shareholders’ equity was S$15.7 billion, an increase of S$6.3 billion from 31 March 2020, while the group’s debt-equity ratio fell from 1.27 times to 0.78 times.

Cash and bank balances increased by S$4.4 billion to S$7.1 billion, while total debt rose by S$0.4 billion to S$12.2 billion due to the drawdown of new debt facilities.

In the first nine months, SIA increased its liquidity by approximately S$12.7 billion. In December 2020, SIA closed a five-year convertible bond issuance for S$850 million and a private placement of 10-year notes that raised S$500 million.

The aforementioned S$12.7 billion comprises S$8.8 billion from a rights issue completed last June; S$2 billion from secured financings against A350 and 787-10 aircraft; S$1.4 billion from convertible bond and notes issuances; and S$0.5 billion of new committed lines of credit and short term loans.

Further to the fundraising efforts in the first nine months of 2020, SIA also issued its first USD-denominated bond in January 2021, raising $500 million (or S$666 million equivalent).

This boosted its total Covid funds raised to date to approximately S$13.3 billion in additional liquidity.

Discussions on sale and leaseback transactions for additional cash are “at an advanced stage”, said SIA.

The Singapore flag carrier continues to have access to more than S$2.1 billion in committed credit lines, along with the option to raise up to S$6.2 billion in additional mandatory convertible bonds before its AGM in July.

“These liquidity measures will allow the Group to be in a position of strength as it emerges from this crisis,” the SIA board stated.