SQ's Q2 net profit down 36.2%

[MAN Flyer]

SINGAPORE: Singapore Airlines (SIA) said Thursday its fiscal second quarter net profit fell 36.2 per cent from the previous year and the outlook remained weak due to slowing travel demand and volatile currencies.

The airline earned S$324 million in the three months to September, down from S$508 million. Revenue came in at S$4.38 billion, up 10.4 per cent from the same quarter last year.

Expenditure, however, surged 20.3 per cent to S$4.15 billion led by higher fuel costs, SIA said in a statement.

"The financial turmoil around the world and weak consumer confidence are impacting demand for air transportation," it said.

"Although advance bookings for the immediate next quarter are holding up reasonably well, there are signs of weakness beyond that. Fuel prices have retreated, but fuel remains the biggest single item of operating expenditure."


http://www.channelnewsasia.com/stori...388080/1/.html

[SQflyergirl]

wow!, a nice round 324,000,000! Would have been $323,999,960 if i didn't buy that lipstick from Krisshop that time

[9V-SIA]

"Although advance bookings for the immediate next quarter are holding up reasonably well, there are signs of weakness beyond that. Fuel prices have retreated, but fuel remains the biggest single item of operating expenditure."

I'm booking my flights last minute in the hope that fuel surcharges will fall further.

I just hope there's still a flight!

Not looking forward to red eye to Osaka next April ( since the morning flight is cancelled )...

Hope these results also mean they got their fuel hedging policy right MAN Flyer

[Tanandika]

To be honest, I actually feel happy for SQ that their net profit is down by 36.2%
I know it's very selfish of me to be happy when a company's profit is down that dramatically, but the fact is, with the recent economic failures, the biggest asset of a company, especially airlines, are their customers- loyal customers. And when all it seems SQ has been doing in the past months is nothing but a constant effort to disappoint loyal customers, it's not surprising that they choose leave SQ for another airline. I'm not saying that accounts for all the decline in profit, but I believe that it plays a part.

[Desert Traveller]

Profit down by 'only' 36.2% is still a profit. That's a very solid result compared to what other airlines are delivering.

[LionCity]

Profit down by 'only' 36.2% is still a profit. That's a very solid result compared to what other airlines are delivering.

Yes, it is still solid result and paying a dividend of 20 cents in this market situation. With crude oil dropping to USD 60 a barrel and school holidays in Singapore plus Christmas holidays should be bright for SQ.

SQ Biz class cabin pricing have been adjusted upwards although I don't quite grasped their methodology of increase in these troubled financial times.

I guessed they are reasonable confidential of what they are doing.

[HUGE AL]

wow!, a nice round 324,000,000! Would have been $323,999,960 if i didn't buy that lipstick from Krisshop that time

I can't believe they didn't even give you credit!

[flyguy]

SQ next quarter should be better as oil prices have dropped by half to 2007 levels by then and its surcharges are still in force altho dropped marginally.
However for the next couple of months in view of the economic downturn, there are still more cities where SQ can cut capacity other than those announced and like Shanghai and Beijing frequencies can be cut esp during mid-week as loads are int he low 50s to 60s and recently can see that SQ premium loads have dropped considerably.

[milehighj]

SQ next quarter should be better as oil prices have dropped by half to 2007 levels by then and its surcharges are still in force altho dropped marginally.

I disagree. The corporate market was a lot worse in Q3 than in Q2.

Plus it seems that SQ hedged much of its fuel costs at well above $100/barrel.

[zhiw3n]

Looks like their fuel and foreign currency hedging has performed reasonably well to minimise the impact on earnings.

[matt_will_fix_it]

Looks like SQ are doing better than BA however... http://news.bbc.co.uk/2/hi/business/7714763.stm

British Airways profits plummet


BA says it should make a small profit for the full financial year. Half-year profits at British Airways have fallen 91.6%, with the airline blaming "incredibly difficult trading conditions" for the plunge.

[LionCity]

I disagree. The corporate market was a lot worse in Q3 than in Q2.

Plus it seems that SQ hedged much of its fuel costs at well above $100/barrel.

Hard to say which way it will go. They will certainly reap some advantages with fuel cost halving. Based on past experiences SQ is likely to shed some staff and cut cost further. I have heard unsubstantiated rumours that they are actually looking to retrench the older staff as they cost more. Not sure how much they can reduce cost as it is so thin that it is almost threadbare without compromising standard.

The challenge is the reduction in load factors in premium cabins. Probably the reason why they are jacking up ticket cost in biz class to make up for it as they think the remaining pax are less elastic in switching. It is probably a double-edged sword policy as increase in cost will drive down the load factor. At least for me and a couple of other friends, I have decided to switch to another airline on biz class as the fare gap is too big to ignore or downgrade to economy for the next two trips.

I see the load factors dropping substantially as I noticed it is far easier to book a European flight lately in premium class.

[Michelle1212]

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Singapore News

Here it is.


SIA not cutting jobs, remains cautious about oil prices
By Desmond Wong, Channel NewsAsia | Posted: 07 November 2008 2154 hrs








SINGAPORE: Singapore Airlines (SIA) said it is unlikely to cut its staff count, despite the challenging global environment.

Instead, it is seeking to cut costs through rationalising its flight routes, adjusting salaries and hedging fuel costs.

Chew Choon Seng, CEO, Singapore Airlines, said: "We are continuing to stay the course, take delivery of new aircraft as they come on. We still need people to be trained to man those new planes."

SIA booked a 27 per cent drop in first-half earnings to S$682 million, hurt by rising fuel costs and falling demand.

While the global slowdown has affected passenger numbers, SIA said its business traveller numbers have proven resilient.

Huang Cheng Eng, executive vice president, Marketing, SIA, said: "In terms of travel by corporate accounts, the big boys – those that you know are in trouble – have come down, that much is obvious.

"But we also find that there are a lot of other niche and smaller financial institutions that are travelling quite a bit now because they are going all over the world to get business from what the big boys have lost. So that helps in a way."

But while the numbers appear to be holding up, SIA said many are opting to fly economy rather than business class.

The second half of the year should see SIA taking on more aircraft, with its fleet growing to 104 by March 2009.