Singapore Airlines’ challenges

Courtesy Singapore Airlines

Courtesy Singapore Airlines

THE good news is that Singapore Airlines (SIA) carried more passengers – 18.6 million passengers or an increase of 2.3 per cent – in FY2013/14 but the bad news is that yield has not caught up. In a statement issued by the airline, SIA said: “Passenger bookings in the current quarter are expected to match the planned increase in capacity. However, yields are expected to remain under pressure due to promotional activities undertaken to support loads, and other airlines offering aggressive fares while increasing capacity.”

Overall it is good news that the airline made an operating profit of S$256 million (US$205 million), an increase of 36.9 per cent – this, despite a Q4 operating loss. It is the other companies within the Group that are not performing as well. SIA Cargo continued to incur losses, though at S$100 million it was an improved performance compared to a loss of S$167 million a year ago. Both SIA Engineering and SilkAir suffered a decline in profitability; and the latter in particular, down by more than 50 per cent from S$97 million to S$35 million. Losses in Tiger Airways worsened by S$109 million.

Moving forward, it is the airline that will continue to shore up the performance of the Group, which earned an operating profit of S$259 million in FY 2013/14, an increase of 13.1 per cent. Cargo yield is expected to remain weak, and SilkAir appears to have a problem forging an identity of its own. Investment in Tiger Airways will continue to take a toll on the overall result as it struggles to shed its Indonesian Mandala joint-venture. Refocusing on the parent airline’s challenges in an increasingly competitive landscape must be a priority. The recent announcement that SIA will introduce premium economy is a positive step forward. It cannot afford to lose its place in the main stream competition.


About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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