Singapore Airlines Reports Strong Profit Growth, but Challenges Remain
By Gaurav Raghuvanshi
SINGAPORE--Singapore Airlines Ltd. (C6L.SG) Thursday reported that its fiscal second-quarter net profit nearly tripled as it improved its operational performance and as fuel costs stayed benign.
Net profit in the July-to-September quarter was 189.9 million Singapore dollars (US$139.1 million), compared with S$64.9 million in the same period of last year, Singapore Airlines said.
Revenue rose 5.5% on year to S$3.85 billion, the company said in a statement to the Singapore Exchange.
Total expenses rose 2.2% on-year to S$3.62 billion, but the carrier's fuel bill fell 1.7% to S$930.4 million.
"Headwinds remain as competitors mount significant capacity in key markets," Singapore Airlines said, adding that its yields, a key metric of an airline's revenue-generating ability, continue to be under pressure, despite some stabilization in recent months.
Passenger yield, which measures revenue per passenger per kilometer flown, fell to 10 Singapore cents in the September quarter, from 10.2 Singapore cents last year.
Singapore Airlines has been forced to sell more discounted tickets amid intense competition. Passenger load factor, or the portion of its planes filled, rose to 81.8% from 80.4%.
Singapore Airlines added three new Airbus Group S.E. A350 jets during the quarter and removed two older planes from its fleet, taking total fleet size to 108 passenger planes with an average age of seven years and seven months, it said.
All units were profitable in the quarter, with the cargo division returning to a profit amid rising demand for air freight.
The group's discount airline, Scoot Pte., and regional service SilkAir, however, reported smaller operating profits than last year.
Write to Gaurav Raghuvanshi at firstname.lastname@example.org
(END) Dow Jones Newswires
November 07, 2017 05:45 ET (10:45 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.