SIA's Q3 operating profit nearly doubles

Despite turning in a good set of numbers for the third quarter, SIA says the challenging operating environment is set to persist.
Despite turning in a good set of numbers for the third quarter, SIA says the challenging operating environment is set to persist.ST PHOTO: STEPHANIE YEOW

It soars to $288m, with net profit up 35.5%; sterling performances by SIA, SilkAir, Scoot

Singapore Airlines ended 2015 on a high note, with third-quarter operating profit almost doubling to $288 million from $146 million.

Net profit for the three months ended Dec 31 jumped 35.5 per cent year-on-year to $275 million.

The striking set of numbers came on the back of sterling performances by the parent carrier, as well as subsidiaries SilkAir and long-haul budget arm Scoot.

Lower fuel prices also boosted the bottom line.

Both SIA and Scoot filled more seats per aircraft during the quarter, compared with the same three months in 2014.

  • AT A GLANCE

  • NET PROFIT

    $275 million (+35.5%)

  • REVENUE

    $3.9 billion (-3.9%)

SilkAir, which expanded significantly during the period, also carried more passengers than before.

Total group spending was 7.6 per cent lower at $3.7 billion, due mainly to a 41 per cent drop in average jet fuel prices.

This was, however, partially offset by the strengthening of the US dollar against the Singapore currency, and a hedging loss.

Turnover fell 4 per cent year-on-year to $3.94 billion.

Quarterly earnings per share was 23.6 cents, up from 17.3 cents a year earlier, while net asset value per share was $10.97 as at Dec 31, up from $10.66 as at March 31 last year.

Group net profit for the nine months from April to December jumped by 76.6 per cent to $580 million.

Despite the good set of numbers, the challenging operating environment is set to persist, SIA said.

Demand for travel is expected to remain volatile due to economic forces and external events.

Expansion of other full-service airlines and low-cost carriers, particularly in South-east Asia, will also continue to exert pressure on loads, fares and yields.

The International Air Transport Association yesterday said global passenger traffic grew by 6.5 per cent last year, well above the 10-year average annual growth of 5.5 per cent.

This was due mainly to a 5 per cent drop in global air fares compared with 2014, which boosted the demand for air travel.

SIA will remain vigilant in adapting to market changes and drawing on the complementary strengths of the carriers in its portfolio, it said.

The national carrier will also push ahead with its partnerships with other airlines to offer customers a more extensive network of destinations and services.

For the current January to March quarter, SIA will mount supplementary services to various points, including Adelaide, Brisbane, Christchurch, Melbourne, Sapporo and Sydney, to cater to returning traffic from the year-end holidays as well as Chinese New Year.

A sixth daily service to Bangkok will be added from March 27.

Scoot, too, is planning to add new destinations in India later this year.

To drive closer cooperation with Tigerair, which it partially owns, SIA has made a takeover offer for the budget carrier.

A version of this article appeared in the print edition of The Straits Times on February 05, 2016, with the headline 'SIA's Q3 operating profit nearly doubles'. Print Edition | Subscribe