Singapore Air posts worse-than-expected Q2 loss

[belumosi]

SINGAPORE (Reuters) - Singapore Airlines, the world's biggest airline by market value, reported a worse-than-expected second quarter loss as the global economic slowdown hit the carrier's higher margin business travellers particularly hard.

The company, which warned in July it could post a full-year loss if tough conditions last, reported a net loss of S$159 million compared to a net profit of S$324 million a year ago.

Five analysts polled by Reuters had estimated an average net loss of S$37.8 million.

Singapore Air has seen falling passenger and cargo demand this year as a global recession hurt business and leisure travel, forcing it to reduce capacity by 11 percent in the 12 months from April, and cut salaries as well as working hours of its staff.

SIA's capacity cut resulted in an improvement in its overall load factor but yields, or the amount of revenue per passenger, remain under pressure as it cuts prices to attract flyers.

SIA's share price has gained 26 percent since the start of the year, half the 53 percent rise in the broader market.

(Reporting by Harry Suhartono; Editing by Lincoln Feast)

[belumosi]

DATE:10/11/09
SOURCE:Air Transport Intelligence news
SIA remains in red with Q2 loss of S$159 million
By Ghim-Lay Yeo


Singapore Airlines (SIA) has posted a net loss of S$159 million ($114.5 million) during its fiscal second quarter mainly due to higher fuel prices.
This is a S$482.8 million drop from the net profit of S$323.8 million that the Star Alliance member reported a year before.
While the results are an improvement from the net loss of S$307 million that SIA reported in its fiscal first quarter, the carrier remains on track to report its first full-year loss as earlier forecast.
Revenues fell by 30% to S$3.08 billion in the three months to 30 September, and expenditure was 21.3% lower at S$3.26 billion, says SIA. It posted an operating loss of S$181.4 million, versus an operating profit of S$231.7 million a year before.
"Fuel costs ex-hedging for the second quarter at S$942 million was S$202 million higher than the previous quarter, while losses from fuel hedging fell S$87 million to S$200 million," says the group.
For the first six months of the fiscal year, Singapore Airlines itself had an operating loss of S$428 million, compared to a profit of S$495 million a year before. Regional subsidiary Silkair lost S$5 million, SIA Cargo lost S$193 million and maintenance arm SIA Engineering posted a profit of S$47 million.
Group RPKs for the six months fell by 15.6% while capacity, as measured by ASKs, were 13.1% lower. As a result, the passenger load factor was 2.3 percentage points lower at 75.6%.
The group says that it has adjusted flight capacity to match lower demand, and has withdrawn and suspended several services in the reporting quarter. "Advance bookings indicate that demand for air travel has stopped declining and is gradually recovering," it adds.
Yields have fallen due to promotional pricing on flights across SIA's network, with the carrier adding: "The market conditions allow for some rollback of promotional pricing but yields are unlikely to get back to pre-crisis levels within the next six months."
Fuel hedges for the October-March half of the group's fiscal year have been contracted for 3.5 million barrels, at an average of $100 per barrel. "If the recent rise in price of fuel does not retreat, hedging losses will be reduced, but conversely operating cost will be higher," says SIA.

http://www.flightglobal.com/articles...9-million.html

[belumosi]

And the official release here:
http://www.singaporeair.com/saa/en_U...se2QFY0910.pdf

[flyguy]

but things r improving as their J class have been picking up and on certain routes/flights its even 90% full of revenue pax.

[feb01mel]

SIA may restore some capacity cuts made earlier this year

SINGAPORE: Singapore Airlines said it may restore some of the cuts it made to its capacity earlier this year. That is despite being in the red for the first two quarters of the current business year.

SIA said at a news briefing on Wednesday that it is seeing a recovery in business class demand, its mainstay.

SIA is flying in unfamiliar territory. It has never booked two straight quarters of losses before, not since going public. But at half-time this financial year, the losses have amounted to some S$428 million.

A key reason for this is the unprecedented volatility in fuel prices over the past year. Fuel hedging losses for the six months alone amounted to some S$400 million. And so SIA said it has decided to review its fuel-hedging policy.

Chew Choon Seng, CEO, SIA, said: "The magnitude of the volatility forced us to examine the wisdom of adhering to the previously laid down policy.

"The prices of which we were getting on the market were not worth the risk that was being covered and hence we decided to trim the level of our exposure.

"One result of the review is that instead of holding the bottom end of the range at 30 per cent, we have now dropped it to 20."

But despite the challenging business environment, SIA said the outlook is improving.

It has already taken some cost-cutting measures this year, including cutting capacity on less profitable routes.

Mr Chew said: "We may be putting back some capacity on routes where demand is outstripping the capacity that we have right now. I won't be more specific than that because those decisions are not yet made."

Still all eyes will be on the next two quarters on whether SIA will be able to avoid a full-year loss.

Mr Chew added: "Internally, our goal is to keep our record of annual profits unbroken. What are the chances? I will give it our very best shot."

Still, some analysts said that is a tall order.

Shukor Yusof, aviation analyst, Standard & Poor's, said: "All things being equal, SIA will see some improvement in yields and loads, but not enough to overcome the difficult conditions it has faced for the most part of this year.

"We have reviewed our forecast for the company's fiscal year and it's going to be a loss of about S$50 million."

Still, with passenger load factors near 80 per cent, SIA hopes to hold on to that and make efforts to improve yields. SIA is hoping though that air travel demand will pick up as the global economy recovers.

SIA said it is also expecting a boost in passenger numbers through some big events happening in Singapore from the ongoing APEC summit, to the upcoming Changi Airshow in February next year as well as the proposed soft opening of the two Integrated Resorts in the first quarter of next year. - CNA/vm


http://www.channelnewsasia.com/stori...017558/1/.html

[MAN Flyer]

Mr Chew added: "Internally, our goal is to keep our record of annual profits unbroken. What are the chances? I will give it our very best shot."

That's the spirit!. It will not be easy, but you wouldn't put it past them, would you.

[flyguy]

am sure the "record of profitability" will be unbroken after the past 2 quarters of losses - and esp so when the 1st quarter losses were mainly attributed more to its "wrong bets" in fuel hedgings. The main thing is to raise its revenue yield per pax as just purely a high load factor esp for EY is not enough.

[hsf]

Fuel hedging losses for the six months alone amounted to some S$400 million. And so SIA said it has decided to review its fuel-hedging policy.

I find this sentence somewhat amusing.

[9V-SIA]

Just done SIN-LHR-SIN this week. Completely full.

TPP friend waitlisted for F & J Dec SIN-NRT. Confirmed Y though!

My flights SIN-ICN-SFO-ICN-SIN are full too in Dec.

So I'm happy ( for SIA ) and sad for myself ( will they price me out of their J cabins again? )

[flyguy]

generally mid-Nov to Dec and even early Jan are full flights due to the year-end holidays and festivities - and Feb for Aisa flights. The real test would be late feb onwards to see how the load/yield stacks up.

[feb01mel]

SIA's load factor rises slightly on-month to 71.6% in October

SIA's load factor rises slightly on-month to 71.6% in October


SINGAPORE: Singapore Airlines said that it filled 71.6 per cent of the space available on its planes for passengers and cargo in October, compared to 70.3 per cent in September.

This latest figure is also 4.8 percentage points higher than the load factor during the same period in 2008.

The carrier said there are encouraging signs that the decline in demand may have bottomed out, with increasing demand seen in the premium classes.

Passenger load factor jumped 3.6 percentage points on-year to 81.1 per cent in October.

SIA added that the airline will continue to make appropriate adjustments where necessary to better match capacity to forward demand.

- CNA/sc

Source: Channel Newsasia

http://www.channelnewsasia.com/stori...018596/1/.html