5 things I learned from the 2020 Singapore Airlines AGM

The airline industry has been one of the hardest hit due to international border closures caused by COVID-19. For the first quarter of FY20/21, Singapore Airlines (SIA) reported a net loss of S$1.123 billion. This is compared to the S$111 million in profit in the same quarter last year. SIA has also made varying levels of pay cuts for all management and rank-and-file staff, as well as offered the option of early retirement for ground staff and pilots.

As bleak as this looks for SIA, the airline has received extra support from the Singapore government. An analyst has also commented that SIA is in a better position than most airlines to ride out this crisis.

I was interested to find out how SIA intends to ride out this crisis. Hence, I attended SIA’s 2020 virtual AGM and here are five things I learned:

1. SIA’s operations have been massively hit by the COVID-19 pandemic. The International Air Transport Association has forecasted that 2020 will be the worst year in the airline industry’s history. This year will see the sharpest year-on-year dip in the airline industry’s net profit and EBIT margin at least since the 2008 Global Financial Crisis.

Source: Singapore Airlines 2020 AGM presentation slides

Unlike the V-shaped recovery that happened after SARS, the airline industry’s recovery trajectory is taking much slower than expected. While SARS mainly spread across Asia, COVID-19 has made its presence felt worldwide.

Source: Singapore Airlines 2020 AGM presentation slides

On a year-to-year basis, SIA’s key performance indicators in Q1 FY20/21 has undoubtedly been decimated due to international border closures.

Source: Singapore Airlines 2020 AGM presentation slides

2. SIA has S$11 billion in fresh liquidity to tackle the business challenges posed by COVID-19. In May 2020, SIA held an EGM to get shareholders’ approval to raise up to S$15 billion to tide through this present economic downturn. Having received shareholders’ approval, SIA raised S$8.8 billion through mandatory convertible bonds and a 3-for-2 renounceable rights issue.

At the EGM, SIA also had shareholders’ approval to raise another S$6.2 billion in additional mandatory convertible bonds if needed in the future. The increased liquidity gives SIA the buffer and financial credibility to borrow from financial institutions if needed at competitive rates.

SIA also has the potential to raise about S$3.4 billion through aircraft secured financing, existing committed lines of credit renewed until 2021 or later, and from new committed lines of credit and short-term unsecured loans.

3. SIA has implemented various measures in its flights to ensure the safety of its customers. Even though border controls might ease, SIA’s recovery might be limited given the fear consumers might have towards travelling overseas and flying in a confined space.

Apart from the provision of hand sanitisers and safe distancing measures, SIA has also installed high-efficiency particulate air filters on its planes to remove 99.9% of airborne microbes. It will also provide customers a care kit with masks, wipes, and hand sanitiser on board its flights.

SIA is also leveraging on digital technology to ensure the safety of its consumers. For example, its in-flight entertainment system will now be operated through mobile phones and an e-library will replace physical copies of magazines. This is all done with the hope that more people will feel safe travelling given the extensive measures in place to stem the spread of the virus especially in planes.

4. SIA continues to work closely with industry groups and regulators so that borders can reopen safely. From 8 June 2020, Singaporean and Chinese travellers from six cities on business or official visits can visit both countries. In early August 2020, Singapore and Malaysia also agreed on something similar.

SIA has also sought to increase its cargo capacity. It has maintained about 40% of its original cargo capacity by scheduling cargo-only passenger flights and by undertaking ad-hoc charter flights when the opportunities arose.

5. SIA has strong foundations that allow it to continue remaining strong post-pandemic. History might not necessarily repeat itself, but history has shown us that SIA has recovered strongly from many past downturns like 9/11, SARS, and the GFC. In fact, prior to COVID-19, SIA had recorded very strong year-on-year figures for the nine months ended FY19/20.

SIA also has an Employee Support Portal to support its staff during this challenging time. The portal has allowed more than 500 of SIA’s staff to find temporary job placements with links to financial relief schemes too. SIA CEO Goh Choon Phong believes that with SIA’s brand equity, strong balance sheet, talented team, and digital capabilities, the airline can emerge stronger in the post-Covid world.

The fifth perspective

Singapore Airlines, just like any other airline around the world, has been decimated by COVID-19. While the airline will survive as the national carrier of Singapore, it will tough times ahead in years to come. Experts predict that air travel will not recover until 2024. In view of this, investors may prefer to look elsewhere even though SIA’s share price is trending at multi-year lows.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Dean Goh

Dean has written and published investment articles since he was 18. Investing primarily in the U.S. and Chinese equity markets, he bases his investing decisions on good old Buffett-inspired fundamental analysis. He will be studying Philosophy and Economics at the London School of Economics.


  1. Enjoyed a couple of your analysis and updates. Simple and concise. Thank you very much. If you have a mailing list, would like to be on it.
    Am also an alumni of the LSE. 20 years in the industry with Goldman and JPM

    1. Thanks David. Glad you enjoyed them! Haha you’ve fulfilled the dreams of some LSE students (including mine) to join GS/JPM 🙂

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