Singapore Airlines (SIA) has returned to the black in its fiscal third quarter with a net profit of S$404 million ($286 million).
This is an upturn after two loss-making quarters in a row, and a 20% jump in profits from the corresponding period a year before. SIA says that it expects the recovery to continue, although the Star Alliance carrier does not project if it expects to make a profit for the full year.
"The business outlook for the group in 2010 is encouraging but it must be acknowledged that uncertainties linger over the global economy," it adds.
For the quarter ending 31 December 2009, group revenue fell 18% to S$3.4 billion from a year ago and expenditure fell 19% to S$3.1 billion. It posted an operating profit of S$323 million, down from S$357 million a year ago.
"The increase in jet fuel price led to a S$34 million rise in fuel cost before hedging. However, hedging losses were S$146 million lower. Savings in other areas, such as payroll costs, contributed to a further S$57 million," says SIA.
Singapore Airlines itself had an operating profit of S$231 million, compared with a profit of S$314 million a year ago. SIA Cargo posted an operating profit of S$40 million, regional subsidiary SilkAir S$23 million and SIA Engineering S$22 million.
RPKs fell by 5% during the quarter. Capacity, as measured by ASKs, was slashed 10%. As a result, the passenger load factor grew 3.9 percentage points to 82.4%.
SIA says it has adjusted capacity to match demand, and increased flight frequencies on several services in the third fiscal quarter. It has also cut flights to Athens and Dubai, and suspended services to Pakistan and Nanjing.
The carrier decommissioned one Boeing 747-400 aircraft and one Boeing 777, and now operates a fleet of 107 passenger aircraft, it adds.
"Passenger loadings in January and bookings in hand indicate that the recovery in the third quarter is likely to continue in the final quarter of the current financial year. The improvement in yields is also holding up," says SIA.
"Although air cargo shows similar improvement, it is more tentative because of the excess of freighter capacity and the unidirectional nature of cargo flows."
Source: Air Transport Intelligence news
