Singapore Airlines Reports 50% Profit Drop, Shares Fall
Singapore Airlines (SIA) saw a nearly 50% drop in net profit for the first half of the fiscal year, from April to September, citing lower yields and growing competition in key markets. The airline’s shares dropped by 6.2% at market open on Monday, before recovering slightly to a 3.57% loss.
The company reported net profit of SG$742 million ($559.12 million), down 48.5% from SG$1.44 billion in the same period last year. Operating profit also fell by 48.8% to SG$796 million, despite a 3.7% increase in revenue, which reached SG$9.5 billion. However, SIA maintained an interim dividend of 10 Singapore cents per share.
SIA’s management attributed the decline in profit to increased capacity and stronger competition, which pressured yields. Chief Commercial Officer Lee Lik Hsin noted that global competition is intensifying, with other airlines returning to pre-Covid capacity. CEO Goh Choon Phong added that the push to restore capacity also put pressure on yields.
Passenger traffic grew by 7.9% year-on-year, but passenger load factor dropped 2.4 percentage points to 86.4%, due to a capacity expansion of 11%. Despite the competitive pressure, SIA’s management emphasized that they would not reduce capacity growth in response to competition.
Looking ahead, SIA expects robust demand for air travel in the second half of the financial year but acknowledged that the competitive landscape will remain challenging. The airline also announced a SG$1.1 billion cabin retrofit program for its 41 Airbus A350 jets, with the first retrofitted aircraft expected to enter service by 2026 and the program scheduled for completion by 2030.
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Sources: AirGuide Business airguide.info, bing.com, cnbc.com