Singapore Airlines back in black with US$286 million Q3 profit

THE Singapore Airlines (SIA) Group has returned to profit in the third quarter ending December 31 with an unaudited net profit attributable to shareholders of S$404 million (US$286.1 million).

This was a turnaround from losses of S$307 million in the first quarter and S$159 million in the second quarter of its current 2009-10 financial year.

Third quarter group revenue at S$3,418 million was 10.9 per cent higher than in the previous quarter, a statement from Singapore Airlines said.

On the cost side, group expenditure fell 5.2 per cent from the preceding quarter. The increase in jet fuel price led to a S$34 million rise in fuel cost before hedging. However, hedging losses were S$146 million lower. Savings in other areas, such as payroll costs, contributed a further S$57 million.

As a result, group operating profit for the quarter ended December 2009 was S$323 million, in contrast to the operating loss of S$182 million in the previous quarter.

Singapore Airlines recorded a third quarter operating profit of S$231 million against an operating loss of S$157 million in the second quarter, from a combination of a 13.7 per cent increase in revenue on continued recovery in load factors and yields, and lower losses from fuel hedging (-S$120 million).

During the third quarter SIA Cargo registered an operating profit of S$40 million compared to a loss of S$46 million in the third quarter of 2008. SilkAir recorded an operating profit of S$23 million, while SIA Engineering generated an operating profit of S$22 million.

With these results, the net loss attributable to equity holders for the nine-month period ended December 31 has narrowed to S$62 million, from the S$466 million loss recorded in the first half of the group's current financial year.

SIA Cargo transported 300.4 million kilogrammes of cargo and mail during the third quarter, one million kilogrammes less than in the same quarter the previous year. Its cargo load factor amounted to 65.1 per cent, up from 58.4 per cent a year earlier.

SIA transported 4,411,000 passengers during the third quarter, down from 4,751,000 passengers during the corresponding prior year period. Its passenger load factor increased to 82.4 per cent, up from 78.5 per cent a year earlier. Third quarter revenue per passenger-kilometre fell to 22,108.1 million, down from 23,296.7 million in the third quarter of 2008.

Looking ahead, "passenger loads in January and bookings in hand indicate that the recovery in the third quarter is likely to continue in the final quarter of the current financial year. The improvement in yields is also holding up.

"Although air cargo shows similar improvement, it is more tentative because of the excess of freighter capacity and the unidirectional nature of cargo flows. The business outlook for the group in 2010 is encouraging but it must be acknowledged that uncertainties linger over the global economy," a statement from the carrier said.

(Source: www.schednet.com)