Singapore Airlines Q2 Profit Hit by Price Wars
BY :MARIUS ZAHARIA
NOVEMBER 04, 2016
Singapore. Singapore Airlines' reported a 15.5 percent fall in its second-quarter operating profit to S$109 million ($79 million) on Thursday (03/11), blaming "excess capacity and aggressive pricing".
The flagship full-service airline unit contributed S$79 million to the result for the three months ended Sept. 30, with SIA's Silkair regional airline unit and its low-cost subsidiaries Scoot and Tigerair reporting profits as well.
"Most companies in the Group recorded weaker operating results amid a sluggish global economy," SIA said in statement filed to the stock exchange. "However ... low-cost carriers continued to perform better on the back of an extended network and reduced operating expenditure."
SIA Cargo made an operating loss of S$11 million as freight rates remained under pressure from overcapacity in the global market, the company said.
Group revenue fell to S$3.65 billion from S$3.85 billion, while expenditure dropped to S$3.54 billion from S$3.72 billion and net profits were down 70 percent at $65 million.
"Excess capacity and aggressive pricing continue to persist in the market, exerting pressure on loads and yields," SIA said in a statement.
SIA also declared an interim dividend of 9 cents per share.