SIA cuts A350 orders from 70 to 63 at Airbus' request

At the operating level, SIA reported a 140 per cent jump in profits to $108 million, while SilkAir lifted operating profit from $2 million to $5 million.
At the operating level, SIA reported a 140 per cent jump in profits to $108 million, while SilkAir lifted operating profit from $2 million to $5 million.PHOTO: REUTERS

Airline's net profit soars 162% due partly to drop in share of losses from associated firms

SINGAPORE Airlines (SIA) has cut its order of Airbus 350s from 70 to 63 after a request by the plane manufacturer.

An Airbus spokesman told The Straits Times last night that the seven planes that have been released will be delivered to another airline.

She did not name the other carrier or elaborate on the terms of the deal with SIA, citing commercial confidentiality, but said that such agreements are occasionally struck with customers.

SIA, which expects to receive its first A350-900 wide-body aircraft early next year, said the change "will not materially" affect its fleet renewal or growth plans.

The airline provided the update yesterday when it unveiled its second-quarter results.

  • AT A GLANCE

  • REVENUE: $3.7 billion (+1.4%)

    NET PROFIT: $91.2 million (+162%)

    DIVIDEND: Nil

Net profit surged 162 per cent to $91 million for the three months ended June 30 compared with the same period last year.

This was due in part to a reduction in the share of losses from associated companies, including budget carrier Tigerair.

Turnover inched up 1.4 per cent to $3.7 billion.

Total expenditure dipped by less than 1 per cent to $3.6 billion.

At the operating level, the premium parent carrier reported a 140 per cent jump in profits to $108 million, while regional arm SilkAir lifted operating profit from $2 million to $5 million.

SIA Engineering stayed flat while SIA Cargo and the group's long-haul budget arm, Scoot, both recorded operating losses, but the bleeding was less than a year ago.

Group earnings per share jumped to 7.8 cents from three cents a year ago, while net asset value per share was $10.93, up on the $10.66 as at March 31.

SIA said advance passenger bookings in this quarter are higher year-on-year, mainly supported by fare discounts, but there is weaker demand for the Americas and Europe regions, reflecting the competitive environment.

Yields are also expected to remain under pressure, the airline said.

Investment in product upgrades, including the launch of a premium economy class next month, will continue during the year.

Premium economy, which will debut on the Singapore-Sydney route, is targeted mainly at travellers willing to pay a higher fare for more space and comfort.

SIA is also looking forward to the arrival of the A350s, which promise better operating efficiency and economics, to boost its placid long-haul business.

A version of this article appeared in the print edition of The Straits Times on July 30, 2015, with the headline 'SIA cuts A350 orders from 70 to 63 at Airbus' request'. Print Edition | Subscribe