Home / Shipping / Aviation/ Singapore Airlines Q1 profit falls 59% as oil price rise, lower airfares bite

Singapore Airlines Q1 profit falls 59% as oil price rise, lower airfares bite

Comments / {{hitsCtrl.values.hits}} Views / Monday, 30 July 2018 00:18

SINGAPORE (Reuters) - Singapore Airlines Ltd reported a 59% fall in first-quarter net profit, below analyst expectations, due to a rise in the oil price, lower airfares and a lack of one-off items that had boosted the prior year.

The carrier, a benchmark for Asia’s full-service airline industry, earned S$140 million ($102.89 million) in the three months ended June 30, down from a revised figure of S$338 million a year before, it said in a stock exchange filing.

The prior-year figure was restated due to accounting changes and had included S$175 million of one-off benefits from changes to its frequent flyer program accounting and compensation for aircraft delivery slots.

Maybank had forecast a net profit of S$251 million for the first quarter, based on yields, a proxy for airfares, rising by 5.5%.

Singapore Airlines said yields fell by 3.2% during the quarter, bucking a broader global industry trend toward rising yields.

The figure was dragged down by a 10.3% decline at regional arm SilkAir, which faces stiff competition from budget carriers like AirAsia Group Bhd and is poised to be merged into the parent brand after 2020.Group revenues fell 0.5% to S$3.84 billion during the quarter, with cargo and passenger revenues rising but not by enough to cover the lack of one-off items from the prior year.Singapore Airlines said passenger traffic was expected to grow in the coming months, but costs remained under pressure, especially from higher fuel prices.

Fuel costs rose by S$154 million from a year earlier. The company has hedged 46.3 per cent of its fuel for the remaining nine months of the financial year.

In the first quarter yields at the parent brand fell by 1%, although it filled a higher percentage of seats to boost overall revenue.

Low-cost subsidiary Scoot and SilkAir posted a combined S$1 million in operating profits, down from S$11 million the prior year. Scoot’s yields fell by 1.8%.

Singapore Airlines had topped market expectations in May by reporting a 148% rise in full-year net profit to the highest level since 2011, as passenger and cargo revenue rose and it benefited from a transformation program designed to help cut costs and boost revenue.

Share This Article


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Laurels of ‘Living Together’: Refreshing reflections

Tuesday, 25 September 2018

It was a memorable evening with a mega gathering for a meaningfully different reason. It was not just another book launch with ego-boosting speeches about the author. It was also not an event where a popular politician coming late and preaching about

The fate of the rupee: Central Bank is caught with ‘Devil’s Alternative’

Tuesday, 25 September 2018

Not all are losing when the rupee depreciates The recent depreciation of the rupee against the US dollar in the market has apparently driven the entire nation to a panic mode. While it had been a field day for the media and opposition law makers, the

Southbound rupee and northbound CoL

Tuesday, 25 September 2018

The Sri Lankan Rupee hit a record low of 170 per $ last week, and the Minister of Finance warns of further depreciation. This is inevitable given the chaotic state of the nation’s economy. While the rupee turns south, CoL (cost of living) has no o

In the desert of Tamil films, actor Sivaji Ganesan was an oasis

Saturday, 22 September 2018

‘Indian Film,’ first published in 1963 and co-authored by former Columbia University Professor Erik Barnouw and his student Dr. Subrahmanyam Krishnaswamy, is considered a seminal study of the evolution and growth of Indian cinema. The book is cit

Columnists More