Skywest profit nosedives in first half

Skywest profit nosedives in first half
By admin


Skywest has seen first half profits plunge as it tackled falling loads and yields in "challenging conditions".

The carrier reported a net loss after tax of S$2.2 million (A$1.7m) in the six months to December 31, down from a profit of S$4.5m (A$3.5m) in the previous corresponding period.

The result came despite a record growth in revenues of 19% to S$173m.

But current trading has improved, the airline reported, with January's financial performance "materially better" than 12 months ago.

"The company is conducting an on-going review of the business, organisation, methods and practices," Skywest said. "This has led to considerable cost savings in recent months that will contribute to what is expected to be an improved second half."

The carbon tax wiped S$2m from the bottom line while it also incurred a S$1m cost from aircraft maintenance.

Other factors which dragged down the performance included non-recurring expenses relating to "activities to establish a foundation for continued growth", the consolidation of offices, transfer of flight operations to new facilities at Perth Airport and advisory costs relating to the takeover bid by Virgin Australia.

In addition, yields fell 3% in its scheduled business after a 34% increase in capacity. Skywest said the capacity hike came as aircraft waiting to be deployed in the Fly-in Fly-out (FIFO) operation were shifted to the RPT network.

FIFO capacity fell 18% in the first half while new contracts were negotiated, with revenue down 6%.

"Current trading shows FIFO activity has returned to record levels," Skywest said.

The Australian Regional Airline Network (ARAN), operated by Virgin Australia, continues to play an increasingly important role according to Skywest with revenue in December higher than its RPT business.

The ARAN fleet, now at 10, is expected to reach 12 by the end of June with an additional A320 also joining the Skywest fleet in March.

The carrier said it is also considering the acquisition of two more A320s.

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