Singapore Airlines full-year profit hits record US$846m

  • Business
  • Thursday, 12 May 2005

SINGAPORE (AP) - Singapore Airlines Ltd. said its net profit hit a record 1.389 billion Singapore dollars (US$846 million; euro658.16 million) for the past year - surging 64 percent - as it fended off spiking jet fuel prices and rising competition from Asia's growing number of budget carriers. 

The airline's chief executive, Chew Choon Seng, used the company's public earnings announcement to press Australia to open the lucrative trans-Pacific route to Singapore Airlines, saying he was confident Canberra would "do the right thing.'' 

State-linked Singapore Airlines rebounded strongly from the previous financial year, when an outbreak of SARS, or severe acute respiratory syndrome, battered the travel industry across much of Asia. 

The carrier's financial year ends March 31. 

Chew said a big jump in passenger traffic and strong cargo yields pushed its net profit up to S$1.389 billion, from S$849 million a year earlier. 

"This was a record for the company,'' Chew said in announcing the financial results on Wednesday. 

The carrier's record earnings contrast sharply with quarterly losses at major U.S. airlines such as US Airways, American Airlines and Continental Airlines, all hit hard by competition from budget airlines and high fuel prices, Dow Jones Newswires reported. 

However, Chew said Singapore Airlines' fuel costs for the year also rose - by S$732 million (US$445 million; euro346.2 million) to S$2.148 billion. 

"Fuel prices have been on the uptrend. Those not aware of this must be from Mars,'' Chew said.  

"Fuel went up from when it was barely 20 percent (of costs) to 25 percent now.'' 

Singapore Airlines said it paid an average of US$54.50 for a barrel of jet fuel for the financial year ending March 31, compared to US$37.50 the previous financial year.  

Chew said jet fuel prices now stand at about US$65. 

Despite its record earnings, the airline's fourth-quarter profit declined to S$297.8 million (US$181.5 million; euro141.2 million) for the three months ending March 31, down from S$478 million a year earlier, as regional travel slumped following the Dec. 26 tsunami that hit countries on the Indian Ocean coastline. 

Chew said SIA, which has only suffered one losing quarter in 30 years of operations, would not hold back despite jet fuel costs, and was planning to add flights to a number of destinations including those in Australia, China and India. 

He said the airline hopes the Australian government will soon grant the Singapore Airlines rights to the lucrative route between Sydney and the United States. 

Australia has been reluctant agree to such an accord because it would allow Singapore's national carrier to compete with Sydney-based Qantas Airways Ltd. on the route. 

Qantas currently shares the route only with UAL Corp.'s United Airlines. 

"We're quite confident the Australian government will do the right thing and grant SIA the Sydney-L.A. route,'' said Chew, adding that it was just "a matter of when.'' 

Negotiations between Singapore and Australian transport officials are set to resume later this month. 

Singapore Airlines is majority-owned by Temasek Holdings, the city-state's investment arm. - AP

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