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10-05-2012, 07:33 AM
The Straits Times
May 10, 2012
SIA shocker: $38m loss in fourth quarter
By Karamjit Kaur
SINGAPORE Airlines (SIA) incurred an unexpected $38 million loss in the three months from January to March.
It brought earnings for the full financial year to $336 million, a dip of almost 70 per cent on 2010-2011.
The loss also marked the carrier's first quarter in the red in more than two years. Analysts had projected that profits would fall due to high oil prices and weak yields, but the loss surprised many.
SIA said it went into the red mainly due to the cost of disposing of its last Boeing 747-400 aircraft.
Analysts, however, pointed out that even without taking into account the B-747 factor, the group - made up of the parent carrier, its regional arm SilkAir, SIA Cargo and SIA Engineering - suffered an operating loss of $5 million during the quarter.
Total spending for the 12 months ended March 31 increased by 10 per cent to $14.6 billion, mainly on the back of high fuel prices.
Although SIA carried more passengers during the year, stiff competition from other carriers, as well as weak economic growth in some markets, especially in Europe and the United States, put pressure on fares and pushed yields down.
The future has many challenges, the airline said. When he last met reporters and analysts in November, SIA chief executive officer Goh Choon Phong said the problems facing SIA were different from those during the last global financial slowdown in 2008.
Back then, the downturn was sharp but recovery came fairly quickly. Fuel prices also fell significantly.
SIA will pay shareholders a final dividend of 10 cents per share, down from 40 cents a year ago.
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The Straits Times
May 10, 2012
Dark skies for SIA and other airlines
High fuel prices and economic slowdown drag down earnings
By Karamjit Kaur
IF THE outlook is dim for Singapore Airlines (SIA), its rivals are not being spared either.
High fuel prices and weak yields, especially in first and business classes, have hit not just SIA, but other airlines like Qantas and Cathay Pacific as well.
Despite having carried more passengers in the year that ended on March 31, the local carrier said yesterday that profits slid to $336 million - an almost 70 per cent dip from the last financial year.
It was fuel, which typically accounts for more than 40 per cent of an airline's total costs, which evaporated its profits. Last year, the average price of jet fuel was US$133 a barrel, 32 per cent more than in the year before that.
Also feeling the heat, Cathay Pacific yesterday said its first-half earnings will be disappointing due to the uncertain global economic outlook and high fuel prices.
To deal with the slowdown, mainly in Europe and the United States, it will cut capacity and deploy more fuel-efficient aircraft on some of its long-haul routes.
The carrier's chief executive John Slosar said: 'This is not just a Cathay Pacific problem. It's clearly an industry-wide issue; continued high fuel prices in particular are hitting airlines hard across the globe.'
Layoffs may even be on the cards for Australia's Qantas. It announced in February that profits in the second half of last year had plunged 84 per cent to just A$42 million ($54.7 million); at least 500 jobs may be shed.
Analyst Brendan Sobie from the Centre for Asia Pacific Aviation, a think-tank, said Asia's full-service carriers are facing similar challenges.
'The market within Asia remains strong, but this is now primarily served by budget carriers.
'Asia's full-service carriers face increasing competition from budget carriers in the short-haul market, while most long-haul markets have been hit by the global economic situation.'
The challenges are not unique to SIA, but it is more exposed, for example, to competition from low-cost carriers that are more active here than, say, in Japan or Hong Kong.
Aviation analyst K. Ajith of UOB Kay Hian said: 'The problem for SIA is that the long-haul business, which historically has been the major source of its earnings, will continue to be challenging.'
To deal with the slowdown, SIA has asked its more than 1,000 cadets, second and first officers to consider taking from a week to two years off with no pay.
So far, no other austerity measures have been announced.
Mr Tony Sim, who heads the Singapore Airlines Staff Union that represents cabin crew and other rank-and-file staff, said the union will work with the airline to overcome the current difficulties.
May 10, 2012
SIA shocker: $38m loss in fourth quarter
By Karamjit Kaur
SINGAPORE Airlines (SIA) incurred an unexpected $38 million loss in the three months from January to March.
It brought earnings for the full financial year to $336 million, a dip of almost 70 per cent on 2010-2011.
The loss also marked the carrier's first quarter in the red in more than two years. Analysts had projected that profits would fall due to high oil prices and weak yields, but the loss surprised many.
SIA said it went into the red mainly due to the cost of disposing of its last Boeing 747-400 aircraft.
Analysts, however, pointed out that even without taking into account the B-747 factor, the group - made up of the parent carrier, its regional arm SilkAir, SIA Cargo and SIA Engineering - suffered an operating loss of $5 million during the quarter.
Total spending for the 12 months ended March 31 increased by 10 per cent to $14.6 billion, mainly on the back of high fuel prices.
Although SIA carried more passengers during the year, stiff competition from other carriers, as well as weak economic growth in some markets, especially in Europe and the United States, put pressure on fares and pushed yields down.
The future has many challenges, the airline said. When he last met reporters and analysts in November, SIA chief executive officer Goh Choon Phong said the problems facing SIA were different from those during the last global financial slowdown in 2008.
Back then, the downturn was sharp but recovery came fairly quickly. Fuel prices also fell significantly.
SIA will pay shareholders a final dividend of 10 cents per share, down from 40 cents a year ago.
----------------------
The Straits Times
May 10, 2012
Dark skies for SIA and other airlines
High fuel prices and economic slowdown drag down earnings
By Karamjit Kaur
IF THE outlook is dim for Singapore Airlines (SIA), its rivals are not being spared either.
High fuel prices and weak yields, especially in first and business classes, have hit not just SIA, but other airlines like Qantas and Cathay Pacific as well.
Despite having carried more passengers in the year that ended on March 31, the local carrier said yesterday that profits slid to $336 million - an almost 70 per cent dip from the last financial year.
It was fuel, which typically accounts for more than 40 per cent of an airline's total costs, which evaporated its profits. Last year, the average price of jet fuel was US$133 a barrel, 32 per cent more than in the year before that.
Also feeling the heat, Cathay Pacific yesterday said its first-half earnings will be disappointing due to the uncertain global economic outlook and high fuel prices.
To deal with the slowdown, mainly in Europe and the United States, it will cut capacity and deploy more fuel-efficient aircraft on some of its long-haul routes.
The carrier's chief executive John Slosar said: 'This is not just a Cathay Pacific problem. It's clearly an industry-wide issue; continued high fuel prices in particular are hitting airlines hard across the globe.'
Layoffs may even be on the cards for Australia's Qantas. It announced in February that profits in the second half of last year had plunged 84 per cent to just A$42 million ($54.7 million); at least 500 jobs may be shed.
Analyst Brendan Sobie from the Centre for Asia Pacific Aviation, a think-tank, said Asia's full-service carriers are facing similar challenges.
'The market within Asia remains strong, but this is now primarily served by budget carriers.
'Asia's full-service carriers face increasing competition from budget carriers in the short-haul market, while most long-haul markets have been hit by the global economic situation.'
The challenges are not unique to SIA, but it is more exposed, for example, to competition from low-cost carriers that are more active here than, say, in Japan or Hong Kong.
Aviation analyst K. Ajith of UOB Kay Hian said: 'The problem for SIA is that the long-haul business, which historically has been the major source of its earnings, will continue to be challenging.'
To deal with the slowdown, SIA has asked its more than 1,000 cadets, second and first officers to consider taking from a week to two years off with no pay.
So far, no other austerity measures have been announced.
Mr Tony Sim, who heads the Singapore Airlines Staff Union that represents cabin crew and other rank-and-file staff, said the union will work with the airline to overcome the current difficulties.
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