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By Geoff Easdown
Herald Sun
April 17, 2009 07:48am

ONE of the world’s biggest airlines yesterday reported a devastating decline in passenger numbers, underscoring the severity of the industry’s global crisis.

Singapore Airlines said its passenger and cargo loads across all routes in March averaged just 62.6 per cent – 7.4 points below break-even, The Herald Sun reports.

And last night American Airlines reported a $US375 million ($A523 million) loss for the quarter after sales fell 15 per cent.

”For the moment we’re not seeing evidence of either improvement or further deterioration in the business,” American’s chief financial officer Tom Horton said.

In another blow yesterday, one of China’s three major state-owned carriers, China Eastern, said it suffered a 15.3 billion yuan ($A3.02 billion) loss for last year due to fewer passengers, high fuel costs and a wrong bet on fuel-hedging contracts.

SIA’s March numbers showed why it slashed long-haul fares two weeks ago, starting a savage price war.

The figures indicated that most of SIA’s jets would have operated at a loss last month. Freight volumes were also in negative territory, with total loads falling 21 million tonnes and filling just 58.5 per cent of available space.

The release of SIA’s disastrous March numbers comes two days after Qantas shocked the aviation world by axing 1750 jobs, deferring up to 16 new aircraft orders and parking another 10 jets – taking the number it has mothballed to 20.

SIA, Qantas, Emirates and Cathay Pacific have been at “war” for the past two weeks after Singapore slashed Australia-London fares by at least 50 per cent.

SIA’s price cutting, seen as a last resort, followed an earlier range of measures after it reported a 42.8 per cent fall in net profit in its third quarter to December.

Flights to Europe, where SIA has sought to stimulate ticket sales with its new fleet of six A380 super jumbos, were worst hit.

European traffic fell 18.4 per cent to 69.2 per cent compared with March last year.

North American services were similarly hit, with passenger numbers averaging 68.5 per cent – down 7.2 per cent on a year-to-year basis.

Total passenger numbers fell about 388,000 to 1.3 million in the airline’s worst month since the credit crunch began last September. Flights to South West Pacific destinations, including Australia and New Zealand, and to East Asian destinations were the only services on which load factors exceeded 70 per cent, generally considered the point at which flights become profitable.

SIA told the Singapore Stock Exchange yesterday the global economic downturn had weakened travel demand and capacity would be cut 11 per cent over the next year.

The airline will remove 17 aircraft from service for at least a year. SIA has ordered staff to take paid and unpaid leave and early retirement,28318,25345819-5014090,00.html?referrer=email&source=eDM_newspulse


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