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The Singapore Airlines Group returned to
profitability in the third quarter of the financial year with a
net profit attributable to equity holders of $404 million. This
was a turnaround from losses of $307 million in the first quarter
and $159 million in the second quarter.
Group revenue at $3,418 million was $336 million
(+10.9%) higher than the second quarter, while on the cost side,
group expenditure fell $169 million (-5.2%) from the preceding
quarter. The increase in jet fuel price led to a $34 million rise
in fuel cost before hedging, although hedging losses were $146
million lower. Savings in other areas, such as payroll costs,
contributed a further $57 million. As a result, group operating
profit for the quarter ended December 2009 was $323 million, in
contrast to the operating loss of $182 million in the previous
quarter.
The Parent Airline Company recorded an operating
profit of $231 million in the third quarter, against an operating
loss of $157 million in the previous quarter, from a combination
of higher revenue (+$335 million or +13.7%) on continued recovery
in load factors and yields, and lower losses from fuel hedging
(-$120 million).
All the main companies in the group were
profitable in the quarter:
• Singapore Airlines Operating profit of $ 231
million (profit of $314 million in 2008)
• SIA Cargo Operating
profit of $ 40 million (loss of $46 million in 2008)
• SilkAir
Operating profit of $ 23 million (profit of $12 million in 2008)
• SIA Engineering Operating profit of $ 22 million (profit of $29
million in 2008)
Including non-operating items and taxes, the
group net profit attributable to equity holders for the third
quarter of $404 million is $67 million higher than the same
quarter last year. With this result, the net loss attributable to
equity holders for the nine-month period of the financial year
has narrowed to $62 million, from the $466 million loss
recorded in the first half.
Fleet / Routes
The
company decommissioned one Boeing 747-400 and one Boeing 777 during the
quarter. As at 31 December 2009, the operating fleet comprised 107
passenger aircraft – eight B747-400s, seventy-six B777s, ten
A380-800s, eight A330-300s and five A340-500s – with an average age of 6 years and 3 months.
During the quarter, there were
increased frequencies to Auckland, Christchurch, Brisbane, Perth,
Manchester, Rome and Houston (via Moscow), and since 19 January
2010 the non-stop all-Business Class service to Newark has
returned to daily operations. On the other hand, flights to
Athens and Dubai were reduced during the quarter, and services to
Pakistan and Nanjing will be suspended with effect from February
2010 and March 2010, respectively. From late March, Munich
will be added to the SIA network, and the
A380 will be deployed
to Zurich.
Outlook
Passenger loadings in January and
bookings in hand indicate that the recovery in the third
quarter is likely to continue in the final quarter of the current
financial year. The improvement in yields is also holding up.
Although air cargo shows similar improvement, it is more tentative because of the excess of freighter capacity and the
unidirectional nature of cargo flows. The business outlook for
the group in 2010 is encouraging but the company acknowledged
that uncertainties still linger over the global economy.
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