Singapore Airlines expects challenging times ahead

Courtesy Singapore Airlines

Courtesy Singapore Airlines

Singapore Airlines (SIA) reported a third quarter (Oct-Dec) operating profit of S$87m (US$702m) compared to S$137m a year ago – down 36 per cent, in spite of improved passenger numbers because of lower yield. Passenger carriage increased by 7.4 per cent, outstripping capacity increase of 4.6 per cent.

The last quarter is not expected to be much better as the airline expects challenging times ahead in light of the troubled European economy, weak recovery in the United States and the high price of jet fuel. Apart from some promotional activities to boost ticket sale, there is an obvious lack of excitement, whether externally driven or internally generated. In the current and last quarter (Jan-Mar), SIA is reducing frequencies to weaker markets.

Subsidiary regional carrier SilkAir also registered declining operating profit from S$32m last year to S$34m.

With Qatar reporting astronomical profits and Japanese carriers – Japan Airlines and All Nippon Airways – expecting better performance results in spite of the Dreamliner problem, SIA seems to be at best floating comfortably but not making waves.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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