Singapore Airlines Q3 Net Profit Drops
Singapore Airlines reported a third quarter net profit of SGD$177.2 million (USD$124.9 million), down from SGD$274.9 million in the previous year period.
Operating profit came in at SGD$292.9 million, a 1.7 percent increase on the previous year, partly due to a strong performance by its SIA Cargo unit and lower fuel costs.
Group revenue fell SGD$97 million to SGD$3.84 billion, as a SGD$173 million drop at its main Singapore Airlines brand was partly balanced by a SGD$49 million increase at low cost carrier Scoot.
Total expenditure for the quarter was down SGD$102.1 million at SGD$3.55 billion, on a SGD$200 million fuel cost saving as fuel hedging losses eased.
A bright spot for the quarter was the recovery at its cargo unit where stronger than expected peak demand saw an SGD$8 million increase in revenue, coupled with a SGD$43 million drop in expenditure on lower fuel costs. Operating profit came in at SGD$53 million.
The Singapore Air full service airline saw a 1.3 percent fall in RPK (revenue passenger km) and flat capacity (in available seat km - ASK) leading to a passenger load factor of 79 percent, down a percentage point from the previous year.
Low cost long-haul carrier Scoot saw a modest profit increase on a 35.5 percent lift in revenue. A boost in passengers carried was offset by lower yield as it added capacity. The capacity increase of 51.8 percent was partially responsible for a 4.2 percentage point drop in load factor to 80.8 percent.
During the quarter the group took delivery of six aircraft, five Airbus A350-900s for Singapore Airlines, and one 737-800 for SilkAir as that carrier continued its switch to an all-Boeing fleet.
Looking forward SIA said “2017 is expected to be another challenging year amid tepid global economic conditions and geopolitical concerns, alongside other market headwinds such as overcapacity and aggressive pricing by competitors. Loads and yields for both the passenger and cargo businesses are projected to remain under pressure.”