Singapore Airlines records net loss of 99 mln Dollars in January-March

Ivan Schwartz
May 19, 2017

The move is not expected to have a material impact on SIA's financial performance in the 2017/18 financial year.

But Singapore Air group, which owns Singapore Air, as well as a regional airline and two budget carriers, posted a net loss of S$138.3m for the three months ended March, when analysts had been expecting a profit of S$54.3m.

"The addition of more modern, fuel-efficient aircraft with new-generation cabin products is enabling the Group to expand its network and enhance its competitiveness in both the full-service and low-priced market segments".

Planned aircraft deliveries in the 2017-18 financial year include 10 A350-900s and three A380s.

The poor earnings were mainly due to "intense competition which continues to exert pressure on yields amidst persistent cost pressures", said SIA. It also expected its decision to operate Scoot and Tiger under the Scoot brand to deliver advantages.

Despite the loss, many strategic initiatives implemented to address structural changes in the industry are now showing positive results, the airline said.

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"It would be interesting to see how Singapore Air Group's transformation plans compare with Cathay's", said Ms Corrine Png, chief executive officer at Crucial Perspective Pte in Singapore.

"A dedicated Transformation Office is conducting a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes, to better position the Group for long-term sustainable growth across its portfolio of full-service and budget airline operations".

Singapore Airlines (SIA) reported a 55 percent drop in full year net profit as a soft fourth quarter hit the overall result.

Passenger yield, or the money earned by flying a person for one kilometre, declined 4.7 per cent to 10.1 Singapore cents in the period.

"As fuel remains a significant portion of the Group's expenditure, the Group continues to hedge its fuel requirements prudently", the airline said in its results statement. The carrier's load factor fell marginally to 79 per cent as capacity cuts lagged passenger falls.

SIA Cargo now has seven aircraft in its freighter fleet, while the proportion of revenue from passenger aircraft bellyhold capacity has increased significantly, SIA said.

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