SINGAPORE (Bloomberg): Singapore Airlines Ltd. signaled profitability will remain under pressure despite expected "robust” demand for travel in the second half of the fiscal year, as it reported a slump in profit.
The airline’s net income fell 59% to S$290 million ($220 million) in the quarter ending Sept. 30, which spans the lucrative peak summer-travel period. Revenue rose 2% to S$4.8 billion.
Net fuel costs, after hedging, rose 10.6% in the period. Costs more broadly jumped almost 14.7%, outstripping the incremental revenue growth. Yield, a key indicator of airline profitability, slid again by 6.5% to 10.1 Singaporean cents per kilometer.
"The operating landscape will continue to be competitive,” the airline said in a statement Friday. "The Group will remain nimble and agile, adjusting its passenger network and capacity to match evolving demand patterns.”
The city-state’s flag carrier continues to grapple with a host of challenges from greater competition, geopolitical challenges and inflationary cost pressures.
Singapore Airlines earlier this week pledged to invest S$1.1 billion to overhaul the seats in its long-haul aircraft, including all-new first-and business-class products, to maintain its world-leading premium offering.
From next year, the airport will start charging travelers and airlines more to fly by raising certain fees collected through ticket purchases to fund its S$3 billion upgrade of Changi Airport ahead of its multi-billion expansion of a fifth passenger terminal.
Singapore Airlines’s passenger volume rose 8% to 9.63 million people in the third quarter compared to the same time last year, but that’s still short of its all-time high of 10 million travelers flown in the quarter before Covid.
The company closed 0.6% lower Friday, leaving shares slightly lower for this year.
-- ©2024 Bloomberg L.P.
