SIA sees small rise in profits amid difficult conditions
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Singapore Airlines achieved a small increase in operating profits in the first half of its 2014-15 financial year.
In the six month period ending 30 September 2014, the group generated profits of SG$171 million (US$132m) – 1.2% higher than the first half of 2013.
This growth came despite a 2.0% drop in revenues, to SG$7.59 billion – a result SIA attributed to “changes in aircraft delivery slots” and “lower income from the… expiry of leases to Royal Brunei Airlines”. Group expenditure however, declined 2.1% to SG$7.42bn, resulting in the higher profits.
By unit, mainline carrier SIA generated operating profits of SG$183m, down 1.6% year-on-year, while income from regional carrier SilkAir slumped 77.3% to just SG$5m. The group’s overall improvement was the result of SIA Cargo slashing its losses from SG$71m to SG$34m.
SIA’s group net profit slumped 55.5% to SG$157m in the first half however, due to losses attributed to Tiger Airways, which is not included in the operating results.
The group took delivery of four new passenger aircraft in the most recent quarter, including two Airbus A330-300s for SIA and two Boeing 737-800s for SilkAir. The group’s total passenger fleet now stands at 135 aircraft, including 105 for SIA, 24 for SilkAir and six for Scoot.
While not making a profit forecast for the second half of the year, SIA did admit that “concerns persist” in terms of the “operating landscape [and] uncertain global economic climate”.
“Demand is generally flat and yields will remain under pressure amid intense competition from other airlines and promotional activities in weaker markets,” the company warned. “While there has been a reprieve from cost pressures arising from the decline in fuel prices in recent months, there is concern that the decline reflects a slowdown in major economies in the world which could ultimately hurt travel demand.
“The group will continue to track market movements closely and make appropriate adjustments to capacity, while practising cost discipline in all business areas.” It added however, that “the group is well positioned to meet the challenges ahead”.
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