Singapore Airlines kicks off revamp after first loss in five years

Joanna Estrada
May 20, 2017

Shares of SIA - the only Asian airline to have flown the Concorde and the first in the world to fly the A380 superjumbo - have risen 11 per cent this year, lagging behind the 15 per cent gains for the Bloomberg Asia Pacific Airlines Index.

Net profit for the year to end March was SGD$360.4 million, down from the previous year's SGD$804.4 million.

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.

Singapore Airlines blamed intense competition arising from excess capacity in major markets for the decline in passenger yields.

"The size of the loss is quite staggering for the three months and it would indicate that SIA would need to do something drastic and radical to overcome its difficulties in the coming years", he told AFP. "With Scoot and Tiger Airways preparing to operate under the single Scoot brand, more synergies are expected within the budget segment, both operationally and strategically", the airline said.

SIA said the new aircraft would enable the group to expand its network and boost competitiveness in both the full-service and low-priced segments.

SIA said full year revenue across the airline group was down 2.4 per cent to S$14.87 billion.

SIA said the many strategic initiatives being implemented to address the structural changes in the industry were now showing positive results.

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. RPK (revenue passenger km) traffic was up 2.6 percent on an ASK (available seat km) capacity increase of 3.6 percent.

"The addition of more modern, fuel-efficient aircraft with new-generation cabin products is enabling the Group to expand its network and enhance its competitiveness in both the full-service and low-priced market segments", SIA said.

SHARES of Singapore Airlines (SIA) fell 6.3 per cent or 68 Singapore cents to S$10.08 on Friday morning after the carrier reported an unexpected fourth-quarter loss. Cargo revenue was also down $87m on the back of cargo yield erosion, notwithstanding higher freight carriage.

Other reports by Click Lancashire

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