SIA loses $138m in Q4, full-year profit halved

SIA loses $138m in Q4, full-year profit halved

The airline expects to take delivery of ten A350-900s and three A380-800s during the 2017-18 financial year, and remove two A330-300s, four A380-800s, two 777-200s and one 777-200ER from the fleet, again as leases expire.

For the full year, parent carrier Singapore Airline's operating profit was S$386 million, down 20% YOY.

The SIA Group on Thursday announced a 55.2 per cent fall in annual net profit, to $S360m ($US258.5m), after posting a surprise fourth-quarter net loss of $S138m.

SIA is following in the footsteps of the other marquee Asian carrier Cathay Pacific Airways, which has embarked on a three-year revamp to cut costs after reporting its first floss in eight years.

The dip in profit was attributed to intense competition amid persistent cost pressures, said SIA.

To that end, SIA said it had established a wide-ranging review of the airline group's network, fleet, product and service, as well as organisational structure and processes as part of efforts to build on the strategic initiatives now being implemented and achieve long-term sustainable growth.

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SIA said the new aircraft would enable the group to expand its network and boost competitiveness in both the full-service and low-priced segments.

The move is not expected to have a material impact on SIA's financial performance in the 2017/18 financial year.

"At the time, it was in the process of growing its fleet to up to 17 747-400Fs, and it was better suited to carry out its expansion as a standalone all-cargo airline", SIA said, adding that the airfreight market has since seen structural changes.

"The addition of more modern, fuel-efficient aircraft with new-generation cabin products is enabling the Group to expand its network and enhance its competitiveness in both the full-service and low-priced market segments", SIA said. Passenger flown revenue declined $382m (-3.2%) despite traffic growth (+2.6%) as yields continued to come under intense pressure.

Singapore Airlines suffered an operating loss of SGD41 million in the March quarter. Cargo revenue was also down S$87 million on the back of cargo yield erosion, notwithstanding higher freight carriage.

SilkAir achieved an 11 per cent improvement in operating profit to S$101 million, while Budget Aviation Holdings (the umbrella company for Tigerair and Scoot) operating profit rose 60 per cent to S$67 million.