Singapore Airlines profit up sharply in June quarter
Singapore Airlines is back in profit, posting a net $SG 78 million in the June quarter after a surprise net loss of $ 38.2 million in the March quarter (all figures in Singapore dollars).
The change in external factors for the airline was that in the corresponding quarter in 2011 the carrier had been significantly impacted by the aftermath of the Japan tsunami disaster and the nuclear crisis at Fukushima.
However other fundamentals appear strong in this year’s June quarter, apart from weak demand for air freight, which Singapore Airlines expects to continue into the immediate future.
Despite the depressed cargo performance, its sales revenue grew by 5.6% compared to a 9.6% rise in passengers numbers, indicating that the airline had traded lower yields through special fare promotions to stimulate the higher revenue that helped get it back into profit.
This strategy, of attracting more passengers through selective offers of lower fares, also kept Singapore Airlines ahead of a 4% rise in fuel costs, which now comprise 40% of the airline’s operating costs.
The airline is now expanding its Australian capacity using A380s, A330s and 777s at a time when Qantas has capped its A380 fleet and is punting the first tranche of its much delayed Boeing 787-8 Dreamliners to Jetstar, which should begin arriving in the second half of next year.
The first major new aircraft deployment to Qantas amid this period of Australian expansion by its rivals in Singapore Airlines and Emirates will be the 787-9, the second variant of the Dreamliner, which has yet to fly, and will not be available to Qantas until 2015, or later.
The Singapore Airlines result is yet another reminder that while Qantas has ground to a halt in terms of international growth, during the most expansionary period in the history of Australia’s air links to the rest of the world since the start of the jet age, its competitors are on the move, adding capacity to Australian cities the national flag carrier neglects, as it clings to refurbished 747s and promises of plastic Boeings to return it to profit in a future that isn’t waiting for it.
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