The carrier is on a wobbly lift off this quarter.
Singapore Airlines opened FY15 with weaker yields, lower load factors and more losses from its associates, mainly Tiger Airways, much to the dismay of analysts.
A report from Barclays reveals that passenger yields continued to decline in 1Q15, and the company guides continued pressure on yields due to competitors’ capacity injection and aggressive fares. However, freight yield turned +1% year on year in 1Q15 narrowing SIA Cargo’s loss from $40 million in 1Q14 to $18 million in 1Q15.
Meanwhile, OCBC indicates that $14 million of SIA’ losses this quarter came from Tiger Airways and weaker performance from engine repair and overhaul centres caused profits from JV to decline by $11 million.
Load factors also declined year on year across SIA, SIlkAir, and SIA Cargo this quarter, implying weaker pricing power. OCBC maintains that aggressive and capacity addition will continue to pressure yields.
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