If an Australian carrier had just posted a quarterly operating profit of $131 million (even in Singapore dollars) to the end of last December there would be dancing in the streets, or in the forecourt of the ASX at the very least.

But the latest such result from Singapore Airlines is actually the subject of some rather tartly worded analyst notes that come sandwiched between proprietary warnings about unauthorised reproduction, which are also a reminder of the intense pressure the main Singaporean carrier has come under from its investment establishment and retail investors and government voices for just about all of this century.

Singapore Airlines quarterly is down by 17% compared to the three months to 31 December 2011, a major no-no in its home territory, where the equation for many people is not what this means for the airline, but for Temasek Holdings, the superannuation arm of the state of Singapore, which holds around a 56% stake in SIA,  and whose investment decisions determine how comfortable most Singaporeans will be in their retirement.

In short, Singapore Airlines is connected intimately to the hip pocket of ordinary people in Singapore in a manner that would be unimaginable when it comes to Qantas and ordinary Australians.  It has nothing to do with ‘I still call Australia home’ waffle. It’s about $$$, whether you directly own shares in SIA or not.

Which is why Singapore Airlines isn’t a sacred cow anymore in SE Asia, unlike, in some quarters, Qantas in this country. If Temasek were hypothetically to decide that it would sell out of Singapore Airlines for three times the current share price, the ensuing debate would be about whether it shouldn’t have settled for anything less than four times the current price. It would be a very dry eyed debate.

This is part of the SIA announcement:

The SIA Group recorded an operating profit of $131 million in the third quarter of the 2012-13 financial year, $26 million (-17%) lower than a year ago.

Group revenue fell marginally by $15 million (-0.4%), mainly from lower cargo revenue due to depressed yields (-3.5%) and poorer loads (-10.0%). On the other hand, passenger revenue improved as promotional activities boosted Group passenger carriage by 7.8%, partially offset by lower yields (-5.7%). Group expenditure rose by $11 million (+0.3%) to $3,729 million, largely owing to higher staff and variable costs, partly mitigated by a higher fuel hedging gain.

Group net profit for the third quarter was $143 million, $8 million (+6%) higher year-on-year despite recording lower operating profit. This is due to an increase in non-operating items from surplus on the sale of aircraft, spares and spare engines, and higher net interest income, partially offset by a $20 million provision by SIA Cargo in relation to air cargo civil penalty proceedings in respect of competition law matters in Australia and New Zealand.

April to December 2012: For the nine months to December 2012, Group operating profit fell $18 million (-6%) to $273 million.        

Group revenue improved $279 million (+3%) to $11,431 million, driven by stronger passenger carriage (+8.4%), partly offset by weaker yields (-4.2%). Group expenditure increased more, by $297 million (+3%) to $11,158 million, principally on account of higher fuel, staff and variable costs.

The Group posted a net profit of $311 million for the April-December 2012 period, a decline of $63 million (-17%) from the corresponding period in the previous year. Apart from the weaker operating performance, the decrease in net profit was due to lower surplus on sale of aircraft, spares and spare engines, an absence of a return of capital from the redemption of preference shares by an associated company and the provision by SIA Cargo for air cargo civil penalty proceedings, partially offset by higher net interest income.

Contrary to the usual end-of-the-roadism oversimplifications that get peddled in Australia about how Qantas is a victim of geography more than inferior management, Singapore is in its own geoeconomic crisis of relevance when it comes to aviation.

It is no longer a crossroads or gateway to China for the major generators of business travel in North America or Europe, since China has now negotiated non-stop flights between a multitude of its cities and those of the northern world that make it unnecessary to fly to Singapore, unless you live in Australia, or rely on Qantas, which has been notably unsuccessful with China routes compared to peer airlines in the US, or UK, or just about anywhere.

Hong Kong, which may not be technically in China, has nevertheless risen to become the major capital raising and business nexus for China according to some claimants, or at least way more important than Singapore used to be, according to others.

The wealth and economic power advantage Singapore had leveraged and astutely developed with such success in the latter part of the last century is now being diminished by the rise of its neighbors, with their own major if less developed hub airports, and airline brands that are growing faster than Singapore Airlines ever can with only a limited national population to support it.

Everyone wants to be the next Singapore, and it looks like success will be widespread in the coming decades. Being in top management at Singapore Airlines could be argued to be much more challenging than running Qantas, especially as Asia experiences a rise in economically empowered new air travellers and a concurrent shift in consumer sentiment to price rather than quality.

This means that it is not just a matter of fewer international business travellers needing to transit Singapore, but a more rapid rise in numbers through Changi by low cost entities lead by AirAsia, Jetstar Asia, and Singapore Airlines’ own rather sad investment in Tiger Airways, and its new and it no doubt hopes, not so sad investment in Scoot, where it carries all the risk.

Under these circumstances Singapore Airlines can be argued as doing very well to make any money at all.

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