SIA reports 148pc rise in full-year net profit, highest in seven years
- A Monitor Report 01 Jun, 2018 | 293 Views | -+
Singapore : Singapore Airlines Ltd on May 17 topped market expectations by reporting a 148 per cent rise in full-year net profit to the highest level since 2011, as passenger and cargo revenue rose and it benefited from a transformation programme.
However, the airline warned of pressures from intense competition, costs and rising fuel prices despite strong bookings for the coming months and a continued stabilization in airfares.
The carrier, a benchmark for Asia's premium airlines, made S$893 million (US$665.6 million) in the year ended March, up from S$360 million a year earlier.
A strong fourth quarter marked a turnaround from a year ago, when an operating loss by its flagship full-service airline led the company to launch a three-year transformation programme designed to cut costs and boost revenue amid competition from Chinese and Middle Eastern rivals and low-cost carriers.
Singapore Airlines said transformation initiatives including a new revenue management programme, a new airfare pricing structure and the establishment of a centralised pricing unit boosted revenue, while the airline also saved costs via more efficient use of fuel and waste reduction.
"The first year of the ... three-year transformation programme has shown good progress," the airline said. "The next two years of the program will further build on initiatives around enhancements to the customer experience, revenue growth and improvements in operational efficiency."
Singapore Airlines' group revenues rose 6.3 per cent to S$15.8 billion for the full year, with improvements across all business lines, outpacing a 3.5 per cent rise in costs, including an 18 per cent increase in fuel.
In the fourth quarter ended March 31, operating profit rose to S$214 million from S$27 million a year earlier, with the flagship full-service airline swinging from last year's S$41 million loss to a S$137 million profit.
Average ticket prices, or yields, rose one per cent in the fourth quarter, breaking a downward trend as the airline and its peers curbed discounting to counter rising fuel prices.
Singapore Airlines said on May 18 it will absorb its struggling premium wing SilkAir following a multimillion-dollar upgrade as part of a reform drive to stay competitive.
The move comes after the firm, facing tough rivalry in the high-end market from other full-service airlines and in Economy Class from budget carriers, last year consolidated its low-cost units TigerAir and Scoot into a single entity in a streamlining exercise.