ATW Daily News

SIA suffers heavy loss but sees demand 'gradually recovering'

Wednesday November 11, 2009

Singapore Airlines reported a S$158.8 million ($114.4 million) loss in its fiscal second quarter ended Sept. 30, reversed from a S$323.8 million profit in the year-ago period, but said that "advanced bookings indicate that demand for air travel has stopped declining and is gradually recovering."

Group revenue fell 29.6% year-over-year to S$3.08 billion against a 21.3% cut in expenses to S$3.26 billion. Operating result swung to a S$181.4 million loss from a S$231.7 million profit in the three months ended Sept. 30, 2008.

The SQ airline unit suffered a S$157 million operating loss in the quarter and now is S$428 million in the red through the half-year, a figure that includes a S$400 million fuel hedging loss. It reported a S$495 million profit in the year-ago semester. SIA Engineering made S$47 million in the six months ended Sept. 30, SIA Cargo lost S$193 million and SilkAir lost S$5 million.

Second-quarter passenger numbers fell 13.6% year-over-year to 4.2 million as RPKs sank 11.8% to 21.25 billion. Capacity was cut 12.4% to 26.69 billion ASKs, lifting load factor 0.5 point to 79.6%. Yield plunged 23.4% to S$9.8 cents and unit cost improved 8.4% to S$8.7 cents. Cargo load factor rose 2.1 points to 62.9% but carriage was down 15.4% and yield plummeted 32.5% to S$28.7 cents. "For the northern winter schedule, flight frequencies will continue to be adjusted to match demand," the company said.

SIA took delivery of four A380-800s and four A330-300s during the semester while decommissioning three 747-400s. The operating fleet comprised nine 747-400s, 77 777s, 10 A380-800s, eight A330-300s and five A340-500s as of Sept. 30.

Looking ahead, SIA said that "market conditions allow for some rollback of promotional pricing but yields are unlikely to get back to pre-crisis levels within the next six months."

by Brian Straus

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