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Singapore Airlines’ net profit soars by 182.4% to $257m
On back of cheaper jet fuel.
Singapore’s flag carrier cruises towards an almost-tripled bottomline as cheaper jet fuel continued to drive earnings despite the airline’s weak yields.
According to a report by OCBC Research, 1Q17 revenue, however, fell by 2.1% yoy to $3.65b as the parent airline recorded a 3.7% and 1.7% decline in passenger yield and carriage, respectively; but partially offset by improved performance from Scoot and SilkAir on the back of growth in operations.
“SIA cargo worsened as yield fell 17.4% YoY but partly mitigated by 6.4% growth in volume. SIAEC also came in weaker but recorded one-off divestment gain less provision of S$156.7m,” the report said.
Meanwhile, operating expenses also fell by 4.4% yoy to $3.46b, as net fuel costs fell by 28.5% on back of a 28% drop in average fuel price and lower hedging loss.
However, OCBC adds that this was partially offset by the strengthening of USD against SGD.
“1QFY17 ex-fuel costs rose 8.3% YoY mainly due to capacity expansion at Scoot and SilkAir and impact of stronger USD. Consequently, stripping out oneoff items attributable to SIAEC, SIA’s 1QFY17 PATMI improved 9.5% YoY to S$99.9m,” the report said.
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