Singapore Airlines Q3 operating profit up 1.7%
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Singapore Airlines reported on Tuesday a 1.7 percent rise in third-quarter operating profit, helped by an unexpected growth from cargo and mail, while net fuel costs fell.
Profit reached S$293 million ($207 million) for the three months ended Dec. 31, S$5 million up from the same period last year.
The carrier, a barometer of the health of Asia’s airline industry, said “2017 is expected to be another challenging year amid tepid global economic conditions and geopolitical concerns, alongside other market headwinds such as overcapacity and aggressive pricing by competitors.”
The company has come under pressure due to weakening demand for full-service long-haul travel amid competition from low-cost carriers and Middle Eastern network carriers.
Operating profit in its main SIA brand fell 16.6 percent to S$151 million. Profit fell 9.1 percent in its Silkair regional airline, and was flat-to-slightly-higher for low-cost subsidiaries, Tiger Airways and Scoot.
Net fuel costs declined $200 million, largely due to a $256 million reduction in fuel hedging loss, the company said.
Questions & Answers
Q.What contributed to the unexpected growth in Singapore Airlines' third-quarter operating profit?
What contributed to the unexpected growth in Singapore Airlines' third-quarter operating profit?
The rise in operating profit was helped by unexpected growth from cargo and mail operations. Also, net fuel costs declined, primarily due to a significant reduction in fuel hedging losses.
Q.How did the performance of Singapore Airlines' main brand compare to its subsidiaries?
How did the performance of Singapore Airlines' main brand compare to its subsidiaries?
Operating profit for the main SIA brand fell by 16.6 percent. Its Silkair regional airline saw a 9.1 percent profit decrease, while low-cost subsidiaries Tiger Airways and Scoot experienced flat to slightly higher profits.
Q.What is the company's outlook for the upcoming year?
What is the company's outlook for the upcoming year?
Singapore Airlines expects 2017 to be another challenging year. This is attributed to tepid global economic conditions, geopolitical concerns, overcapacity, and aggressive pricing from competitors in the market.
Q.What was the main reason for the decline in net fuel costs?
What was the main reason for the decline in net fuel costs?
Net fuel costs fell by $200 million, largely due to a $256 million reduction in fuel hedging loss. This significant decrease in hedging losses directly impacted the overall fuel cost.
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