The SIA Group posted a net profit of Sin$78 million
(+Sin$33 million, or +73%) in the first quarter of the 2012-13
Group operating profit of Sin$72 million improved
million, albeit off a low base as the group was confronted with
higher fuel costs and depressed demand following the Japanese
earthquake in the same quarter last year.
Group revenue grew 6% (+Sin$200 million) to Sin$3,777
million, bolstered by a 9.6% improvement in passenger carriage.
This traffic growth was driven by promotions undertaken to boost
loads, amid intense competition and weak business sentiment. As a
result, yields declined 3% from the same period in the previous
Expenditure at Sin$3,705 million was up 4%.
Although jet fuel prices retreated, fuel cost before hedging was
nonetheless 2% higher against last year, mainly attributable to
increased fuel uplift due to the 4.3% capacity growth. Staff costs
were higher mainly due to increased activities, and wage
adjustments following the conclusion of collective agreements with
the Unions. Other variable costs also rose in line with the
increase in capacity.
The operating results of the main companies in
the SIA Group for the first quarter are as follows:
- Singapore Airlines Operating profit of Sin$85
million (Sin$36 million loss in 2011)
- SIA Engineering Operating profit of Sin$34
million (Sin$35 million profit in 2011)
- SilkAir Operating profit of Sin$18 million (Sin$21
million profit in 2011)
- SIA Cargo Operating loss of Sin$49 million (Sin$14
million loss in 2011)
Singapore Airlines turned around from an
operating loss of Sin$36 million in the first quarter of the last
financial year to record a profit of Sin$85 million for the three
months ended 30 June 2012. Revenue (+7%) rose at a faster pace
than expenditure (+3%) on the back of increased passenger carriage
(+9.6%), partially offset by lower yields (-3%). Average jet fuel
prices for the quarter remained high at above US$130 per barrel
despite the recent correction. Other cost items were well
contained as a result of continued efforts to maintain strict cost
On the cargo front, continued weakness in air
freight demand exerted downward pressure on cargo loads and eroded
yields. As a result, SIA Cargo’s operating loss for the first
quarter widened by Sin$35 million.
Q1 2012-13 Operating
In the first quarter of the financial year
2012-13, the Singapore Airlines’ passenger carriage (in
revenue passenger kilometres) grew 9.6% year-on-year. With traffic
growth outpacing the 4.3% capacity growth (in available seat-kilometres), passenger load factor of 79.5% was 3.9 percentage points higher.
SilkAir’s passenger load factor of 76.4% was
marginally higher year-on-year, as capacity injection of 24.7% was
matched by a 24.9% increase in passenger carriage.
SIA Cargo recorded a 5.6% decline in load
tonne-kilometres despite reductions in available freight capacity
(in capacity tonne-kilometres). This brought load factor down by
1.9 percentage points to 62.8%.
Fleet and Route
Singapore Airlines took delivery of one
A380-800 in the April – June 2012 quarter.
As at 30 June 2012,
Singapore Airlines’ operating fleet comprised 100 passenger
aircraft – 59 B777s, 19 A330-300s, 17 A380-800s and five A340-500s
– with an average age of 6 years 4 months.
As at 30 June 2012, SIA Cargo operated a fleet
of 13 B747-400 freighter aircraft, while SilkAir’s operating fleet
comprised 21 aircraft – 15 A320-200s and six A319-100s.
commenced operations in June 2012 with two B777-200 aircraft to
Sydney and the Gold Coast in Australia.
From July 2012, Singapore Airlines’ services to Adelaide will increase from seven to ten
times weekly. Four additional weekly services will also be added
to London Heathrow from September 2012 and this will be stepped up
to four-times-daily services at the end of October 2012.
From 28 October 2012, additional services will
be introduced to Perth and Mumbai, while frequencies to Milan,
Barcelona and Istanbul will be reduced. In addition, services to
Athens and Abu Dhabi will cease.
three-times-weekly services to both Wuhan and Hanoi during the
quarter, and there are plans to increase frequencies to Hyderabad
from September 2012.
The global economy remains uncertain as Europe
struggles to contain its debt crisis, while the United States
faces a sluggish recovery. This has negatively impacted business
confidence and the outlook for travel demand. Promotional efforts
undertaken to boost carriage add downward pressure on yields,
especially in Europe and the United States.
Forward indicators for air freight signal a weak
outlook for the cargo business. SIA Cargo faces pressure with
respect to both demand and yields.
While jet fuel prices have receded in recent
weeks, they are still near historical highs. Fuel continues to be
the group’s largest expense item, accounting for about 40% of
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