Thu, 1 Aug 2019

SIA Reports Q1 Operating Profit Of $200 Million

The SIA Group reported an operating profit of $200 million in the April-June 2019 quarter, $7 million or 3.6% higher compared to the same period last year. Growth in group revenue of $258 million outpaced the $251 million rise in expenditure.

Group revenue amounted to $4,102 million, a 6.7% gain year-on-year. Flown revenue was up $226 million (+6.3%), with passenger flown revenue improving $271 million (+8.8%), led by traffic growth of 8.1%, on a 6.6% increase in capacity. Despite the significant capacity injection, RASK (revenue per available seat-kilometre) improved 1.3%. Cargo flown revenue declined $45 million (-8.4%), as both cargo yield and cargo load factor fell by 4.2% and 2.7 percentage points respectively due to weak cargo demand amid trade uncertainties.

Expenditure for the group increased $251 million (+6.9%) to $3,902 million. Ex-fuel costs rose by $157 million (+6.1%), in line with the capacity increase. Net fuel cost rose $94 million, led by an increase in volume uplifted (+5.9% or $70 million) on capacity expansion, and a stronger US dollar (+$33 million).

Singapore Airlines Airbus A350-900. Picture by Steven Howard of Click to enlarge.

Group net profit for the quarter was $111 million, down $29 million or 20.7% from last year. The reduction was largely attributable to a higher share of losses from associated companies (-$31 million), as an improvement in Vistaraís performance was offset by higher estimated losses from Virgin Australia. Net finance charges also increased (-$26 million) due to the recognition of interest expense arising from lease liabilities following the adoption of IFRS 16 Leases , and additional financing for fleet renewal and growth. These were partially alleviated by an improvement in group operating profit (+$7 million), a higher share of profit from joint venture companies (+$9 million) and lower provision for taxation (+$8 million).

Operating profit for the Parent Airline Company increased $51 million to $232 million, as strong revenue growth outpaced higher expenditure. The year-on-year increase in revenue of $250 million was mainly attributable to robust growth in passenger flown revenue (+$258 million). The higher passenger flown revenue was driven by a 9.0% increase in passenger traffic (measured in revenue passenger kilometres). Passenger load factor rose 1.2 percentage points to 83.2%, the highest on record for the first quarter, notwithstanding the capacity growth of 7.4% (measured in available seat-kilometres). RASK improved 2.4%, or 4.9% on a constant currency basis. Expenditure was up $199 million (+6.8%). Ex-fuel costs increased $118 million (+5.8%), attributable largely to the growth in passenger capacity. Net fuel cost also rose, by $81 million (+9.2%), largely due to a higher volume uplifted (+6.2%) and a stronger US dollar.

SilkAir was significantly impacted by the grounding of its six Boeing 737 MAX 8 aircraft during the period. Measures have been taken to mitigate the effects, however, which contained the reduction in capacity to 1.6%. This capacity reduction, together with a 2.9% yield contraction, contributed to a $10 million decline in revenue. Passenger load factor rose on the back of 2.4% traffic growth, driving a 1.3% improvement in unit revenues (RASK). Expenditure rose $6 million (+2.5%), primarily due to costs related to the MAX 8 grounding. Consequently, an operating loss of $16 million was recorded by SilkAir for the quarter, against a marginal profit of $0.2 million in the same period last year.

Singapore Airlines Boeing 777-300ER MSN34574 reg: 9V-SWI in a Star Alliance livery in the foreground with a Singapore Airlines Airbus A380 MSN253 reg: 9V-SKY in the background. Picture by Steven Howard of at Changi Airport in Singapore. Click to enlarge.

Scootís operating performance also reversed from last yearís operating profit of $1 million to a loss of $37 million this year. Scoot proactively reduced aircraft utilisation during the period to improve operational resilience, and has recorded improvements in its on time performance. As a result, capacity growth was restrained to 6.5%. This was matched by passenger traffic growth, resulting in an unchanged passenger load factor of 86.1%. Flown revenue grew by $14 million (+3.6%), lagging capacity growth, as RASK contracted by 2.1% on lower yields. Other operating revenue declined by $10 million. Expenditure rose $42 million (+10.1%), arising from the expansion of Scootís fleet and operations, including higher net fuel cost (+7.9%).

Operating profit for SIA Engineering rose to $18 million, an increase of $8 million year-on-year. Revenue was flat against last year, as a $2 million revenue improvement in the airframe and line maintenance segment was offset by a decrease in the engine and component overhaul segment. Expenditure fell, mainly from a reduction in material costs.

Route Development

To mitigate the disruption in services on SilkAir due to the grounding of the Boeing 737 MAX 8 fleet, the Parent Airline Company has been operating supplementary services to existing SilkAir destinations such as Kuala Lumpur, Yangon, and (from 1 July 2019) Phuket. SIA will also see the addition of four-times-weekly Seattle services during the Northern Summer operating season (31 March 2019 to 26 October 2019). As at 30 June 2019, SIA served 63 destinations, including Singapore.

SilkAir completed the transfer of services to Scoot, for Trivandrum in India, Luang Prabang and Vientiane in Laos, and Changsha, Fuzhou, Kunming and Wuhan in China. Chiang Mai, Coimbatore and Visakhapatnam are on track for transfer in October 2019, subject to regulatory approvals. Including its inaugural services to Busan launched on 1 May 2019, SilkAir served 43 destinations as at 30 June 2019, including Singapore.

Scoot aircraft at Changi Airport in Singapore. Picture by Steven Howard of Click to enlarge.

Scootís presence in China continues to expand with the commencement of its four new destinations transferred from SilkAir. Kota Bharu services were also launched on 2 July 2019, becoming Scootís seventh destination in Malaysia. Following a network review, services to Lucknow and Kalibo were discontinued, while Bengaluru and Shenzhen services were transferred to SIA and SilkAir, respectively. Scoot ended the quarter with 66 destinations, including Singapore.

As at 30 June 2019, the portfolio of airlines in the group served 135 destinations in 37 countries and territories, including Singapore.

SIAís cargo operations will continue to pursue charter opportunities and deploy capacity to match demand. The freighter network covers 19 cities, including Singapore.


Passenger bookings in the forward months are tracking closely against capacity growth, supported by premium cabin traffic to key markets. Air freight demand has softened amid ongoing trade disputes and uncertain global economic conditions. These headwinds also cloud the outlook for passenger demand over the longer term.

Fuel price volatility is expected to persist in the near term, but the groupís strong hedge position will help to mitigate any spike in prices. For the second quarter of the financial year, the group has hedged 79% of its fuel requirements in MOPS at a weighted average price of USD75. For the remainder of the financial year, the group has hedged 70% of its fuel requirements in MOPS and 5% in Brent at weighted average prices of USD76 and USD52 respectively. The group will continue to enter into longer dated hedges extending to FY2024/25.

Headlines: AirAsia to Resume Manila - Saigon Flights; Launch Clark - Tagbilaran  COVID19: Qantas and Jetstar Make Major Changes to Network  Air Astana Changes Ticket Rules for Travellers from HK, JP, MO, SG, KR and TH  Hong Kong Int. Airport Introduces New Round of Relief Measures  Russian Helicopters to Commence Production of Ansat Aurus  Hong Kong Win Bronze at Inaugural World Rugby HSBC Sevens Challenger Series  Bangkok Airways Partners AXAThailand to Offer 'Protective Wing'  ANA to Test Autonomous Mobility Assistance at Narita Airport  Green Light for MotoGP in Buri Ram, Thailand  Aviation: COVID19 Cuts Demand and Revenues  Martin Dell Returns Home as GM of Four Seasons Hotel Prague  SWISS Takes Delivery of First A320neo  Sabre's Sean Menke to Participate in Keynote Interview at ITB Berlin  Executive Appointments at Outrigger Hospitality  CWT Appoints Linda Creighton as Vice President - Business Finance  Hilton to Open Garden Inn Hotel at Adventure Parc Snowdonia, North Wales  AirAsia Philippines to Launch Flights to Zamboanga from Cebu and Clark  Swiss-Belhotel Opens First Hotel in Malaysia  Joanne Taylor Joins FCM as Director of Account Management Asia  Thai Airways Waives Fees on Japan, Korea, Singapore and Taiwan Flights  SalamAir Partners Tune Protect for Travel Insurance  American Airlines to Expand Preordered Meal Service  Etihad Airways to Launch TravelPass  AirAsia to Launch Flights from Clark and Cebu to General Santos, Philippines  MICE in North Wales - Interview with Richard Jones of venue cymru, Llandudno  Air New Zealand Extends Reduction in Flights to Hong Kong and Shanghai  Patrick de Castelbajac to Join Nordic Aviation Capital as CEO  Thai Airways Opens New Lounge at Phuket Airport  Bulgaria Air and Qatar Airways to Codeshare  Tarom Takes Delivery of First of Nine ATR 72-600s  Whitbread Signs Sixth Premier Inn Hotel in Ireland  Mandarin Oriental Jumeira Dubai Opens Royal Penthouse  COVID19: Zero Risk and Travel Advisories - Where Do We Stop?  Campbell Wilson to Rejoin Scoot as CEO  MIAT to Implement Sabre's Global Demand Data Solution  Cathay Pacific Carried 3M Pax in Jan; Reduces Flight Capacity by 40%  Roger Brantsma Joins 825-Room Hilton Tokyo as General Manger  Thai Airways Increases Passenger Screening on Flights from Cambodia  Mandarin Oriental Boston to Complete US$ 15 Million Renovation in April  Erica Antony Joins CWT as Chief Product Officer  Bjoern van den Oever Joins Alila Villas Koh Russey as Executive Chef  Unicorn Hospitality Opens 47-Room Hotel in Bangkok, Thailand  Hong Kong Airport Handled 5.7 Million Passengers in January  Vietnam Airlines Adds Wide-Body Aircraft to Hanoi - Saigon Route  Pratt & Whitney GTF Engines to Power Korean Air's New A321neos  AsBAA Appoints Jeff Chiang as Chief Operating Officer  Psychometrics at Naruna Retreats in Cambodia, Laos, Myanmar and Thailand  Airbus A330-800 Receives Type Certification from EASA and FAA  Hamza Sehili Joins Four Seasons Tunis as Hotel Manager  British Airways and Royal Air Maroc to Codeshare  Green Africa Airways Signs MOU for 50 Airbus A220-300s  Hong Kong Visitor Arrivals Plummet to Below 3,000 Per Day  What Does Tourism Mean to Conwy, North Wales? Interview with Mayor  Thai Airways Launches Promotion for Royal Orchid Plus Members  Dusit Thani Abu Dhabi Upgrades Rooms and MICE Facilities  FlyArystan to Launch New Routes, Expand Capacity from Almaty, Kazakhstan  Finnair Extends Suspension of Flights to China; Reduces HK Service  SAS Extends Suspension of Flights to China  Air Astana to Launch Flights to Mumbai, India  HK7s and Singapore Sevens Rescheduled  Quay Hotel & Spa in Deganwy, North Wales - Interview with Brid Collins  Royal Thai Air Force Orders Six Airbus H135 Helicopters  CWT Appoints Laura Watterson as SVP - Global Talent & Rewards  Yee Pin Tan Joins Six Senses as Head of Design  Boeing Forecasts Southeast Asia to Need 4,500 New Airplanes Over Next 20 Years  Bombardier Completes Strategic Exit from Commercial Aviation  British Airways to Launch Flights Between London Heathrow and Newquay  Six Senses Appoints Bryan Gabriel as CCO  Piotr Madej Joins The Andaman Langkawi as GM  Sustainable Inspiration from Farmer Gareth Wyn Jones in North Wales  PNG Air Orders Three ATR 42-600S Aircraft  Japan Airlines Joins Amadeus NDC [X] Program  BBAM to Convert Three Boeing 737-800s into Freighters  John Woolley Joins The Ritz-Carlton Bali as GM  French Navy to Operate Four Airbus H160 Helicopters  British Airways Extends Suspension of Flights to Beijing and Shanghai  Air France Extends Suspension of Flights to Beijing and Shanghai  Welsh Wine from the Gwinllan Conwy Vineyard - Interview with Colin Bennett  Vietjet to Launch Three New Routes to India  WTTC's 20th Global Summit to Take Place 22-23 April in Cancun, Mexico  Keio Plaza Hotel Tokyo to Open Renovated Rooms on 29 March  2019-nCoV - Arbitrary Restrictions and Blanket Travel Bans Cause Confusion  China and Mandarin Airlines Make Further Changes to Cross-Strait Services  Premier Inn to Add 735 Beds to Scotland Portfolio in 2020  Valentino Longo Wins North America's Most Imaginative Bartender Competition  Aviation: Slower But Steady Growth in 2019  Three Countries to Participate in Singapore Airshow 2020 Flying Displays  2019 Worst Year for Air Cargo Since End of Global Financial Crisis in 2009  Korean Air to Sell Land and Assets  ibis Styles Hotel Opens in Bekasi, Indonesia  Air France Takes Delivery of Airbus' 350th A350  United Airlines to Buy a Flight Training Academy  Bombardier to Double Size of Service Centre at London Biggin Hill  LA7s to Take Place at Dignity Health Sports Park in Los Angeles 29 Feb - 1 Mar  Singapore Airshow 2020 Still On; SAALS Cancelled  IHG Signs 61-Key InterContinental Resort in Khao Yai, Thailand  Fusion Suites Opens in Vung Tau, Vietnam  Aeroviation Expands Flight Training in Singapore with DA-20 Simulator  CWT Appoints Nick Vournakis as MD - Global Customer Group  SEHT Aviation Donates Six SH40-10 Headsets to Aerobility  China Airlines Adds 2019-nCoV Service Information Centre to Website  Four Seasons Resort Lanai Appoints Bradley Russell as Resort Manager  Leading Yachts of the World Appoints Anthony Brisacq as CEO  Second Four Seasons Hotel in Tokyo Starts Accepting Reservations  Korean Air to Launch Passenger and Cargo Flights to Budapest, Hungary  Aviation: Alliance Established to Investigate Use of Blockchain in MRO Chain  SAS Closes Sale of Beijing and Shanghai Flights Until 15 March  North Face 100 Thailand Attracts Over 4,000 Runners from 20+ Countries  Hong Kong Air Cargo Renews IOSA Registration  Swiss-Belhotel to Open Over 2,000 Rooms in 12 Hotels in Indonesia  Elena Nazarovici Joins The Sanchaya Bintan as Director of Sales  Amadeus Joins Mastercard's City Possible Network  Asia Pacific Airlines Carried 375.5m Int. Pax in 2019  Thai Airways Reduces Flights to Mainland China  Cebu Pacific Cancels All Flights to Hong Kong and Macau  Batik Air Takes Delivery of First Airbus A320neo  Fiji Beat South Africa to Win First HSBC Sydney Sevens  Maldives Rejoins Commonwealth  Korean Air Making a Difference to Orphans in Tondano, Sulawesi  Qatar Airways Becomes Official Airline of Paris Saint-Germain  Polish Air Ambulance Service Orders Two Learjet 75 Liberty Aircraft  Vietnam Airlines Makes Changes to Hong Kong, Macau and Taiwan Flights  Football: Pictures from Ascot United FC vs Egham Town FC  Aerobility - The British Flying Charity, Interview with Mike Miller-Smith MBE  ANA and SIA Sign Joint Venture Framework Agreement  Dusit Signs First Hotel in Hanoi, Vietnam  SkyWest Orders 20 Embraer E175 Jets  SAS Suspends All Shanghai and Beijing Flights  Kuala Lumpur Int. Airport Trials Single Token Journey Technology  Air Canada Suspends All Flights to Beijing and Shanghai  Korean Air Sets Up Emergency Response Team; Suspends Select China Flights  Mark Radford Joins Trenchard Aviation as VP Business Development  CWT Appoints R. Thompson as VP Global Internal Communications & Culture  Vietjet Launches Daily Flights Between Hanoi and Bali, Indonesia  WTTC Moves April's Global Summit from Puerto Rico to Mexico  Andy Flaig Joins Wyndham as Head of Development South East Asia / Pacific Rim  Air Astana Reports 2019 Net Profit Increase of 461%  NASA Orders Three Airbus H135 Helicopters  Hahn Air Simplifies Distribution of Corporate Shuttle Flights  Sydney 7s to Take Place at Bankwest Stadium on 1-2 February  Russia's Sirena Travel Signs Multi-Year Retailing Deal with ATPCO  Shell to Use Airbus H160 for Offshore Transportation  ANA to Operate International Flights Out of Haneda T2 and T3 from 29 March  CAL Group Makes Changes to Inflight Services on Taiwan-HK / Macau Routes  Philippines Suspends Visa Upon Arrival Service for Chinese Nationals  UK Visitor Arrivals Spending Up 19% in October 2019  Todd Probert Joins CAE as Group President, Defence & Security  Six Senses Appoints Mark Sands as Vice President of Wellness  Air France and Sata Azores Airlines Start Codesharing  Norwegian Implements New Hand Baggage Policy  AirAsia X Launches KL - Taipei - Okinawa Flights  First Boeing 777-9 Begins Flight Tests  Accor Commits to Global Elimination of Single-Use Plastics by 2022  Etihad Receives EASA Approval to Train Boeing 777, 787 Pilots  Jeane Lim Appointed GM of Grand Park City Hall Hotel in Singapore  Whitbread Opens First hub by Premier Inn Hotel Outside of London's Zone 1  Delta Enhances Travel Experience for Pets  All Blacks Sevens Make History in Hamilton  Air Canada Becomes Official Airline of Cirque du Soleil  Phuket to Host Thailand Travel Mart (TTM+) 2020 in June  Thailand: Did Strength of Thai Baht Affect Number of Arrivals from UK in 2019?  Seaplanes in Thailand? Interview with Dennis Keller, CBO of Siam Seaplane  Future of Airline Distribution and NDC - Interview with Yanik Hoyles, IATA  Cambodia Airways Interview with Lucian Hsing, Commercial Director  HD Videos and Interviews  Podcasts from HD Video Interviews  Travel Trade Shows in 2019, 2020 and 2021  High-Res Picture Galleries  Travel News Asia - Latest Travel Industry News 

See latest HD Video Interviews, Podcasts and other news regarding: SIA, Singapore Airlines.

Subscribe to our Latest Travel News Daily Email Free of Charge by simply entering your email address to the right. You can also receive the daily news service by WhatsApp, stay updated with our RSS Feed Free Travel News RSS Feed and even add the travel news to your website. Have questions? Please read our travel news FAQ.
Copyright © 1997-2020