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Singapore Airlines Q3 profit falls 69.6pc, though revenues rise 5.1pc
SINGAPORE Airlines third quarter net profit fell 69.6 per cent year on year to S$64.9 million (US$46.8 million), drawn on revenues of S$3.65 billion, which increased 5.1 per cent.
SIA Cargo widened its operating loss 42.1 per cent to S$11 million. Cargo volumes increased 8.2 per cent, but yields fell 15.7 per cent due to excess capacity in the market.
The bright spot was the performance of its two low-cost carriers, Tigerair and Scoot, both returned a profit from losses last year.
The company decided to drop the 12-year-old Tigerair brand and bundle it in with Scoot next year.
The airline blamed the sluggish global economy for the weak result as operating profit fell 19.3 per cent.
Losses derived from Virgin Australia, of which Singapore Airlines owns 23 per cent, also dragged down non-operating profit.
Passenger volumes at the full-service brand Singapore Airlines fell 4.6 per cent while passenger yield, the airline's unit revenue for flying one passenger a kilometre dropped 3.8 per cent.
Operating profit for the full-service airline fell 19.3 per cent.
The low fuel price, which helped the company reduce fuel expenditure by S$265 million or 22 per cent year on year, itself is accelerating the yield decline, according to vice president Mak Swee Wah.
Many airlines "have the margin [now, thanks to the low cost of fuel], and in order to fill up the flights, they are engaged in discounting," Mr Mak told a press conference. Tigerair took to the sky in 2004 as a short-haul budget airline, while Scoot, which started operation in 2011, focuses on middle- to long-haul.
The integration of the two low cost carriers being expedited after Tigerair was taken private earlier this year by Singapore Airlines and delisted from the Singapore Exchange. In May, Scoot and Tigerair were merged under one holding company, but they have been flying under two separate brands.
Said Budget Aviation Holdings chief Lee Lik Hsin: "We can gain from the single brand, from the synergy of single marketing, as well as communicating the stronger brand benefits to a larger pool of customers."
SIA Cargo widened its operating loss 42.1 per cent to S$11 million. Cargo volumes increased 8.2 per cent, but yields fell 15.7 per cent due to excess capacity in the market.
The bright spot was the performance of its two low-cost carriers, Tigerair and Scoot, both returned a profit from losses last year.
The company decided to drop the 12-year-old Tigerair brand and bundle it in with Scoot next year.
The airline blamed the sluggish global economy for the weak result as operating profit fell 19.3 per cent.
Losses derived from Virgin Australia, of which Singapore Airlines owns 23 per cent, also dragged down non-operating profit.
Passenger volumes at the full-service brand Singapore Airlines fell 4.6 per cent while passenger yield, the airline's unit revenue for flying one passenger a kilometre dropped 3.8 per cent.
Operating profit for the full-service airline fell 19.3 per cent.
The low fuel price, which helped the company reduce fuel expenditure by S$265 million or 22 per cent year on year, itself is accelerating the yield decline, according to vice president Mak Swee Wah.
Many airlines "have the margin [now, thanks to the low cost of fuel], and in order to fill up the flights, they are engaged in discounting," Mr Mak told a press conference. Tigerair took to the sky in 2004 as a short-haul budget airline, while Scoot, which started operation in 2011, focuses on middle- to long-haul.
The integration of the two low cost carriers being expedited after Tigerair was taken private earlier this year by Singapore Airlines and delisted from the Singapore Exchange. In May, Scoot and Tigerair were merged under one holding company, but they have been flying under two separate brands.
Said Budget Aviation Holdings chief Lee Lik Hsin: "We can gain from the single brand, from the synergy of single marketing, as well as communicating the stronger brand benefits to a larger pool of customers."
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