Tough times ahead for Singapore Airlines, but one analyst says it appears better positioned than its peers - CNBC

Singapore Airlines (SIA) welcomes the world’s first Boeing 787-10 aircraft (in the air) as it approaches after its flight from Boeing’s production facility in North Charleston, South Carolina at Singapore Changi Airport on March 28, 2018.

ROSLAN RAHMAN | AFP | Getty Images

As air carriers worldwide are caught in a “race against time” while trying to stay afloat as global travel is nearly completely wiped out, Singapore Airlines appears to be better positioned than its peers, according to one analyst.

“Everyone … is battling this,” Brendan Sobie, an independent analyst at Sobie Aviation, told CNBC’s “Squawk Box” on Thursday.

Comparatively, Singapore Airlines “is in a better position,” he said, citing the Singapore flag carrier’s liquidity position, which in his opinion was better than “virtually anyone in the global airline industry.”

“What that means is they can survive a prolonged downturn, come out of hibernation very strong in a few years and potentially take advantage of consolidation,” Sobie said.

Singapore Airlines on Wednesday reported a net loss of 1.123 billion Singapore dollars (about $816.22 million) in the first quarter. The airline said market conditions were “deteriorating rapidly” due to the global spread of Covid-19.

The airline announced last week it had raised approximately 11 billion Singapore dollars, or about $7.994 billion, through a combination of vehicles such as rights issue and secured financing.

Asked if SIA will need to return to the market soon to secure more funds as it seeks to tide through this period, Sobie said the 11 billion Singapore dollars raised would be “sufficient for some time” and could last more than a year.

“The other thing to keep in mind is … they have an additional 6 billion (Singapore dollars) that they can raise through mandatory convertible bonds … which
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