SIA loses $138m in Q4, full-year profit halved
National carrier to carry out review as profits get battered by competition
Singapore Airlines (SIA) yesterday reported a net loss in the fourth quarter, causing full-year profit to drop by more than half as intense competition continued to buffet the carrier.
SIA has been battling strong competition from Asian low-cost carriers and Middle Eastern airlines, which now boast modern fleets and top-quality in-flight services.
It said in a statement that a "wide-ranging review" of the company's network, fleet, products, services and organisational structure and processes is underway to better position the airline for the future.
The carrier said it suffered a net loss of $138 million in the fourth quarter to March as operating profit tumbled and the airline made a provision for its cargo business, AFP reported.
For the full-year, net profit came in at $360 million, down 55.2 per cent from the previous year, with annual revenue easing 2.4 per cent to $14.9 billion.
"Intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields," the company said.
A rebound in jet fuel prices from last year also eroded earnings, as the average price for Singapore Jet Kerosene climbed from its low of $37.90 a barrel in January last year to $61.90 in March this year, the carrier said.
It is also getting rid of four Airbus A380 superjumbos in its fleet, but will take delivery of three new A380s in the current financial year, which ends on March 31 next year, reported The Straits Times.
By then, the airline will have a total of 109 aircraft, three more than in the last financial year.
Despite the loss, many strategic initiatives implemented to address structural changes in the industry are now showing positive results, the airline said.
Building on this foundation, the next phase of the SIA group's transformation has been launched, it said.
A new office has been set up to conduct a review, encompassing network and fleet, product and service as well as organisational structure and processes, to better position the group for long-term sustainable growth across its portfolio of full-service and budget airline operations.
The review is aimed at identifying new revenue-generation opportunities and reshaping the business into one that continues to deliver high-quality products and services, though with a significantly improved cost base and higher levels of efficiency, the airline said.