Monday February 06, 2006

Soaring fuel costs cut SIA 3Q2005 profit by 14.6%

channelnewsasia.com :

Singapore Airlines has posted a net profit of S$397 million for its fiscal third quarter. The profit for the three months to December was down 14.6% from the same period a year ago. Not surprisingly, high fuel costs ate into the profit margin.

The nearly 4.4 billion passengers carried in the third quarter were the highest recorded for any quarter. But faced with soaring fuel costs, the carrier's expenditure also jumped, by 14% to S$3 billion. SIA spent close to S$1.2 billion on fuel in the third quarter, up almost 50% from a year earlier. Fuel costs account for 37% of the airline's total expenditure. Going forward, SIA expects high fuel prices will continue to be a concern.

business-times.asia1.com.sg :

Singapore Airlines is expected to post its fourth straight quarter of declining profits today as record-high jet fuel prices eroded earnings. Despite a near 60% rise in the cost of jet fuel last year, analysts expect SIA to have fared better than most of its global rivals. Industry experts attribute SIA's success to its low operating costs as well as its success in using the futures market to reduce its exposure to rising fuel prices. The International Air Transport Association said the airline industry suffered a collective loss of US$6 billion in 2005.

Analysts believe the airline's main concern - fuel prices aside - will be growing competition from the Middle East, where carriers such as Emirates, Etihad and Qatar Airways are aggressively trying to lure passengers away from the Europe-Australia route.

See also :

1. To survive, SIA must hive off subsidiaries, says MM Lee

(2006-02-06 15:56:16 SGT) [Biz] Permalink

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