Singapore Airlines Q4 net profit surges

Singapore Airlines says its fourth quarter net profit has surged 47 per cent year-on-year as its fuel bill declined, but warned of a tough outlook due to stiff competition.

Net profit in the three months to March 31 rose to $Sg39.6 million ($A37.05 million) from $Sg27.0 million in the same period a year ago on revenue of $Sg3.88 billion, up from $Sg3.63 billion.

For the full year to March, net profit jumped 2.34 per cent to $Sg367.9 million from $Sg359.5 million, the airline, known as SIA, said on Thursday in a filing to the Singapore Exchange.

Full-year revenue was $Sg15.57 billion, up 2.1 per cent from $Sg15.24 billion.

Fourth quarter performance was boosted due to reduced operating expenditure from lower fuel prices, and improved passenger yields that benefited from “stringent inventory control”, SIA said.

Fuel costs, which account for over a third of expenditures, fell to $Sg1.29 billion from $Sg1.38 billion during the quarter.

World oil prices have fallen sharply since June last year due to a global supply glut.

SIA said full-year profits were dragged down by “weaker share of results from joint venture and associated companies”.

SIA currently owns 55.8 per cent of Tiger Airways after it annexed the struggling budget carrier last year.

For the full year to March, Tiger’s losses widened to $Sg264.2 million from $Sg223 million a year ago, the airline reported separately on May 4.

SIA said the outlook remains tough.

“Market conditions remain challenging amid an uncertain global economic outlook. Demand in key markets is soft, primarily on Americas and European routes,” it said.

“Competition remains intense as other airlines continue to inject capacity with aggressive pricing,” the airline added.

The airline, Asia’s third-largest carrier by market value according to Bloomberg News, said the depreciation of “key revenue-generating currencies” such as the Australian dollar, Japanese yen and the euro will “place further pressure on yield and demand”.

A strengthening US dollar will increase operating costs, it said.

Despite an improving performance from its freight arm, SIA Cargo, the airline said “cargo yields are expected to remain under pressure due to excess capacity in the market”.

The airline said its subsidiaries SilkAir, Scoot and Tiger Airways will add new routes this year, which will see its network expand to 119 destinations from the current 116, across 35 countries.

SIA currently has 105 passenger aircraft including 19 Airbus A380 superjumbos.

SIA shares fell 0.26 per cent to Sg$11.64 ahead of the release of the earnings report. The Straits Times Index rose 0.8 per cent to 3,455.78.

Advertise with us

Email the Travel Weekly team at traveldesk@travelweekly.com.au

singapore airlines sq