SINGAPORE • Singapore Airlines Ltd reported an 81% plunge in second-quarter profit as higher fuel costs weighed on earnings.
Net income for the three months through September fell to S$56.4 million (RM171.79 million) from S$293.3 million a year earlier. Sales rose 5.6% to S$4.06 billion.
The premium Asian carrier joins others such as Deutsche Lufthansa AG and Air China Ltd that have been stung by oil. That’s why the International Air Transport Association cut its outlook for airline profitability for the current year by 12% from an earlier estimate.
The surge in fuel costs, the biggest expense for Asian operators, will pose a challenge for Singapore Air, which is in the middle of a transformation programme. It is seeking to cap costs and better position itself against Middle Eastern and low-cost Asian carriers. Passenger yields — a gauge of money earned carrying a passenger for 1km — slipped 1% in the second quarterly decline. That shows the carrier is still facing a lot of competition in both its premium and economy offerings.
There was good news on the cargo front, with yields climbing 9.9% as shippers rushed to beat tariff increases sparked by the trade dispute between the world’s two biggest economies. Things look more uncertain for 2019 with global economic growth projected to slow.
Singapore Air shares have fallen 12% this year, compared to a 10% decline in the Straits Times Index.
The airline will pay shareholders an interim dividend of eight Singapore cents per share. — Bloomberg