Airline cites “weak revenue environment” as a factor
Singapore Airlines put on a poor showing for the first quarter of the 2014-15 financial year, reporting a 71% year-on-year fall in net profit on the back of intensified competition, “unforeseen events” and the performance of associated companies, TTG Asia reports.
The SIA umbrella group reported an operating profit of S$39 million (€23.3 million), a 52.4% drop over the same period last year.
Discounting non-operating and exceptional items costs, SIA’s profit plunged further to S$35 million, or 71.3% less than the first quarter of the previous financial year.
The airline cited the continued “weak revenue environment” as a factor, compounded by the results from associated and joint venture companies, which contributed S$16 million in losses from last year. Out of this, S$14 million was attributed to Tiger Airways Holdings.
Tiger Airways Holdings shut down its Indonesian offshoot Tigerair Mandala – in which it held a 33% stake – to no one’s surprise after persistently poor results.
SIA did not explain the “unforeseen events” hitting demand, though the mysterious disappearance of Malaysia Airlines’ MH370 and Thailand’s tourism-crushing military coup would have shaken traveller confidence.
“The outlook for the air transportation industry has become more challenging with the continuing uncertain global economic climate, geopolitical concerns in the region and elevated fuel prices,” the airline said.
“Load factors in the current quarter are expected to be stable year-on-year. Aggressive fares and capacity injections from competitors will continue to place pressure on yields.”
[pictured: SIA Airbus A340, courtesy Singapore Airlines]