Hi-Tech

SIA Cargo to be Re-Integrated as Division within Singapore Airlines

SIA Cargo to be Re-Integrated as Division within Singapore Airlines

It added that despite the smaller freighter fleet, SIA Cargo's overall capacity, including that from passenger aircraft, still grew 4-5 per cent in each of the past two financial years.

"The size of the loss is quite staggering for the three months and it would indicate that SIA would need to do something drastic and radical to overcome its difficulties in the coming years", he told AFP.

The SIA Group on Thursday announced a 55.2 per cent fall in annual net profit, to $S360m ($US258.5m), after posting a surprise fourth-quarter net loss of $S138m.

SIA has been battling strong competition from Asian low-priced carriers and Middle Eastern airlines, which now boast modern fleets and top-quality inflight services.

The dip in profit was attributed to intense competition amid persistent cost pressures, said SIA.

The integration is not expected to have a material impact on SIA's financial performance in the 2017/18 financial year. It also expected its decision to operate Scoot and Tiger under the Scoot brand to deliver advantages.

More recently, however, the market has seen "structural change", resulting in SIA Cargo's fleet being trimmed to seven Boeing 747-400 freighters, while a greater proportion of its revenue now comes from utilising bellyhold capacity from the SIA group's carriers.

Building on this foundation, the next phase of the SIA group's transformation has been launched, it said.

It said in a statement that a "wide-ranging review" of the company's network, fleet, products, services, organizational structure, and processes is underway to better position the airline for the future.

SHARES of Singapore Airlines (SIA) fell 6.3 per cent or 68 Singapore cents to S$10.08 on Friday morning after the carrier reported an unexpected fourth-quarter loss.

Load factors eased 0.6 of a percentage point to 79 per cent, while yields slipped 3.8 per cent and cost per available seat kilometre excluding fuel rose 3.6 per cent.

SilkAIr improved its result from $S91m to $S101m, backed by a 9.5 per cent increase in passenger traffic.

Low-priced unit Budget Aviation Holdings boosted its operating profit by $25m to $S67m as passengers carriage grew by 21.2 per cent and capacity by 23.3 per cent. Revenue grew by $169m but this was again partially offset by a 6.3 per cent drop in yield. Cargo revenue was also down S$87 million on the back of cargo yield erosion, notwithstanding higher freight carriage.


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