SIA reports $138m loss in Q4; plans to dump four A-380s in current fleet but take new planes

Singapore Airlines reported a net loss of $138.3 million for the fourth quarter ended Mar 3.
Singapore Airlines reported a net loss of $138.3 million for the fourth quarter ended Mar 3.PHOTO: ST FILE

SINGAPORE - Singapore Airlines will get rid of four Airbus 380 superjumbos in its fleet, but will take delivery of three new A-380s in the current financial year which ends on March 31, 2018.

By then, the airline will have a total of 109 aircraft, three more than in the last financial year.

The announcement came on Thursday evening as the airline reported that it lost $138 million in the three months to March 31, 2017, compared to a $225 million net profit in the same period one year ago.

Full-year profits fell by 55.2 per cent to $360 million.

The weak earnings were due mainly to "intense competition" which continues to exert pressure on yields amidst persistent cost pressures, SIA said on Thursday.

This is especially so in the premium sector which continues to account for a significant portion of the group's revenues, even as steps are being taken to grow Scoot and Tigerair - the group's budget arms.

Group revenue came in at $14.9 billion, down 2.4 per cent from a year earlier, partly because of lower passenger revenue from the parent premium airline and lower cargo revenue.

Total spending fell 2.1 per cent to $14.2 billion, due in part to lower fuel prices.

Operating profit in the January to March quarter fell 81.7 per cent to $28 million.

Group revenue in the fourth quarter was relatively flat at $3.7 billion.

SIA has proposed a final dividend of 11 cents per share.

Including the interim dividend of 9 cents per share paid in November, the total dividend for the 2016-17 financial year will be 20 cents per share.

Full-year earnings per share fell to 30.5 cents from 69 cents a year earlier, while net asset value per share was $11.07 as at March 31, up from $10.96 a year earlier.

The airline faces a challenging operating environment, SIA said.

This has pushed fares and yields down.

Still, the many strategic initiatives implemented to address structural changes in the industry are now showing positive results.

Building on this foundation, the next phase of the SIA group's transformation has been launched, the airline said.

A new office has been set up to conduct a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes, to better position the Group for long-term sustainable growth across its portfolio of full-service and budget airline operations.

The review is aimed at identifying new revenue-generation opportunities and reshaping the business into one that continues to deliver high-quality products and services, though with a significantly improved cost base and higher levels of efficiency, the airline said.