SINGAPORE (Yosefardi) – Singapore Airlines (SIA) booked net profit of $50 million in the third quarter of 2013-2014, dropped 65.0% from the corresponding period a year ago.
The drop was largely due to exceptional items of $80 million and share of losses and one-off items from associated companies, mainly Tiger Airways Holdings Limited arising from impairment in Tigerair
Mandala and losses related to assets held for sale in Tigerair Philippines, together $46 million.
Group revenue was flat at $3,875 million as higher passenger carriage was offset by weaker yields (down by 2.7%) due to efforts to stimulate demand amid the competitive environment and unfavourable exchange rate movements on major revenue generating currencies.
For the nine months to December 2013, Group operating profit improved $47 million (+17.2%) to $320 million. Group revenue was up $185 million (+1.6%) to $11,616 million, and net profit rose 6.8% to $332 million.
SilkAir’s operating profit in the third quarter of the financial year was $28 million lower as passenger carriage growth lagged behind capacity injection to develop emerging destinations in the region.
The Parent Airline Company carried 4.783 million passengers in the third quarter of the financial year, an increase of 2.1% over the same period in the previous year.
SilkAir’s passenger carriage grew 5.2%, but it lagged behind capacity growth of 13.1%. Consequently, passenger load factor was 5.3 percentage points lower at 70.0%.
As at 31 December 2013, SilkAir’s operating fleet comprised 24 aircraft – 18 A320-200s and six A319-100s. SilkAir will take delivery of its first two Boeing 737-800 aircraft in February 2014 and March 2014 with a seat configuration of 12 Business Class seats and 150 Economy Class seats. Two A320-200s will leave the fleet during the January-March 2014 period.
During the quarter, SilkAir commenced services to Yogyakarta, extending the airline’s reach to 12 destinations in Indonesia.
The outlook for the air transportation industry continues to be challenging with airlines offering aggressive fares amidst increasing capacity, and fuel prices remaining high by historical standards.
Air cargo demand is projected to be relatively flat. However, cargo yields are likely to remain under pressure as the cargo business continues to face overcapacity.
Under these circumstances, the Group will proactively make adjustments to flight schedules and capacity to match market demand. Discipline on costs will be maintained. With strong finances, the Group is well positioned to meet the challenges ahead.