Singapore Airlines does better without Tigerair

Courtesy Singapore Airlines

Singapore Airlines (SIA) reported 3Q (Oct-Dec 2017) operating profit of S$155 million (US$118 million), an increase of S$4 million or 2.6 per cent year-on-year. This adds up to a nine-month total of S$566 million compared to S$427 of the previous year, an increase of S$139 million or 32.6 per cent.

SIA can look forward a strong recovery for the full year, as the amount already exceeds last year’s S$386 million, which declined by S$99 million or 20.4 per cent.

Subsidiaries SilkAir and Scoot faced different fortune. Regional carrier SilkAir suffered a dip in operating profit of S$11 million or 36.7 per cent from S$30 million to S$19 million despite an increase in revenue and passenger carriage. Budget carrier Scoot on the other hand reported operating profit of S$43 million, an increase of S$25 million or 48.3 per cent, overtaking its sibling airline.

Courtesy Scoot

As a group (including SIA Cargo and SIA Engineering), 3Q operating profit was S$330 million – an increase of S$37 million or 12.6 per cent – in the absence of Tigerair, which incurred a S$79 million writedown of the its brand a year ago. This adds up to S$843 million for the nine months to December 2017, an increase of S$248 million or 41.7 per cent.

A challenge ahead would be rising fuel cost, which rose by S$86 million or 9.2 per cent in 3Q, fortunately cushioned by gains in hedging. SIA and SilkAir will face pressure on yields from more aggressive competition while Scoot without Tigerair may find opportunities in the low-cost trend for the longer haul and its appeal to millenials.

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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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