SINGAPORE: Singapore Airlines (SIA) said its financial first quarter net profit plunged 71.4 percent from the previous year, weighed down by lower passenger and cargo revenue.
Net profit in the three months to June came in at Sg$34.8m ($27.8m), down from Sg$121.8m in the same period last year, the national flag-carrier said in a statement. Group revenue fell 4.1 percent to Sg$3.68bn.
“Passenger revenue declined year-on-year on the back of weaker yields amid intense competition, and unforeseen events that depressed travel demand in some key Asian markets,” it said.
The airline said revenue from its freight arm SIA Cargo also fell “as the airfreight market continued to be affected by excess capacity”. It added that losses from associated companies, in particular budget carrier Tiger Airways, contributed to the decline in net profit.
“The outlook for the air transportation industry has become more challenging with continuing uncertain global economic climate, geo-political concerns in the region and elevated fuel prices,” it said.
“Aggressive fares and capacity injections from competitors will continue to place pressure on yields,” it added.
SIA has faced stiff competition from Middle Eastern and Asian carriers, as well as Asia’s growing ranks of budget airlines.
The airline said it is “targeting specific product segments and traffic lanes” to boost the performance of SIA Cargo.
AFP
