SIA profits surge in 2013

Singapore Airlines (SIA) achieved a sharp rise in profits in the first half of its financial year.

The group generated net profits of SG$282 million (US$226m) in the six months to 30 September 2013, 67.9% higher than the same period last year. SIA attributed the result to “the sale of aircraft and higher share of profits from associated and joint venture companies”. This includes a gain of SG$339.2m following the sale of its stake in Virgin Atlantic to Delta Air Lines.

The group’s revenue increased 2.2% to SG$7.74 billion in the first half, outpacing a 1.9% rise in expenses, which totalled SG$7.57bn. This resulted in a 19.0% jump in operating profits, to SG$169m.

Mainline carrier SIA carried a total of 9.4m passengers in the first half, 4.0% up year-on-year, while SilkAir’s traffic increased 3.6% to 1.7m.

In the last three months, SIA has taken delivery of four new aircraft – two A330-300s and two Boeing 777-300ERs. It also sold one B777-200 and decommissioned another, in preparation its lease to low-cost subsidiary, Scoot. One A340-500 will also be sold back to Airbus. As a result, SIA’s operating fleet now comprises 103 passenger aircraft – 56 B777s, 24 A330-300s, 19 A380-800s and four A340-500s. SilkAir operates 23 aircraft – 17 A320-200s and six A319-100s – while Scoot has six B777-200s.

Despite the positive results, SIA warned that the landscape for the airline industry “remains challenging”.

“Advance bookings for the coming months are projected to be higher compared to the same period last year on the back of efforts to boost loads. However, ongoing promotional activities necessitated by intense competition and a strong Singapore dollar are expected to place pressure on yields,” the airline said.

It added however, that the group’s financial condition “remains strong”, although it will “continue to monitor market conditions closely and respond appropriately, while maintaining vigilance in cost management”.