Singapore Airlines (SIA) Group posted a net profit of S$238.9 million ($187.6 million) for its fiscal year first half ended Sept. 30, down 62% from net income of S$632.7 in the year-ago period.
Singapore Airlines 777-300ER. Courtesy, Boeing
Singapore Airlines (SIA) Group posted a net profit of S$238.9 million ($187.6 million) for its fiscal-year first half ended Sept. 30, down 62% from net income of S$632.7 in the year-ago period. It said the drop was "principally on account of high fuel costs."
The six-month operating profit of the parent airline company declined 86% year-over-year to S$53 million.
"The prevailing economic uncertainty and weak consumer confidence are impacting demand for air transportation. Advance passenger bookings are showing signs of weakness, particularly in Europe and the United States," SIA Group said in a statement. "Global purchasing manager indices have also fallen, pointing to weaker demand for airfreight. Both passenger and cargo yields are therefore expected to remain under pressure."
It added, "Exacerbating the impact of the weak outlook is the high cost of fuel, which is compounded by the recent strength in the US dollar. Forward prices for jet fuel remain high and volatile."
SIA Group's fiscal first-half revenue rose 3% year-over-year to S$7.28 billion, outpaced by a 10% lift in expenses to S$7.14 billion that included a 35% surge in fuel costs to S$747 million. It said the fuel spike was "partially offset" by a S$118 million year-over-year gain in fuel hedging. Group operating profit for the six months sank 77.5% to S$133.9 million.
SIA's fiscal first-half traffic heightened 3.8% to 43.46 billion RPKs on a 6.3% increase in capacity to 56.09 billion ASKs, producing a load factor of 77.5%, down 1.9 points. Yield was flat at S$0.118.
SIA took delivery of three Airbus A380-800s in the six months ended Sept. 30 while retiring four Boeing 747-400s and returning a 777-300 upon expiration of its lease. As of Sept. 30, its fleet comprised 106 passenger aircraft, including three 747-400s, 65 777s, 19 A330-300s, 14 A380-800s and five A340-500s.