SIA profits rise despite revenue drop
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Singapore Airlines Group has posted a sharp rise in profits for the first half of its financial year, despite declining revenues.
The company generated an operating profit of SG$302 million (US$218m) in the six months to 30 September 2016, up 25.8% compared to the same period last year.
But this was almost entirely driven by falling costs – most notably a 25.2% drop in fuel expenditure. Group revenues declined 3.6% to SG$7.31 billion, including a 6.4% decline in passenger revenues on SIA.
In terms of profits, national carrier SIA increased 34.0% to SG$276m, while SilkAir surged 69.2% to SG$44m, and both Tigerair and Scoot returned to the black with net profits of SG$11m and SG$6m respectively. SIA’s cargo losses almost quadrupled however, to SG$45m.
The company’s overall net profit increased 5.6% to SG$322m.
Looking ahead, SIA said its passenger business will continue to be impacted by weak global economic conditions. “The outlook in most major economies remains tepid. Furthermore, excess capacity and aggressive pricing continue to persist in the market, exerting pressure on loads and yields,” SIA warned.
Like many other airlines, SIA will be hoping that fuel prices remain low in the months and years ahead.
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