November 6, 2008
Singapore Airlines, the world's largest airline by market value, on Thursday reported a better-than-expected 36 percent fall in quarterly profit and warned of weakness in its advance passenger bookings.
Singapore Air has seen declining passenger demand this year as the global economic slowdown crimps corporate and leisure travel, forcing it last week to announce a cut in flights from the city-state to other Asian cities.
"The financial turmoil around the world and weak consumer confidence are impacting demand for air transportation," said Singapore Air in a statement.
"Although advance bookings for the immediate next quarter are holding up reasonably well, there are signs of weakness beyond that," said Singapore Air, whose USD$9.9 billion market value tops US-based budget carrier Southwest Airlines and Japan's All Nippon Airways.
But the airline has seen some relief on the cost-side as jet fuel traded in Singapore dropped 52 percent to USD$87 per barrel from July's peak in line with a slide in crude oil, allowing the company to cut fuel surcharges this week.
Singapore Air said July-September net profit was SGD$324 million (USD$218.6 million) compared with SGD$508 million a year ago.
Revenues for the airline, which derives about half of its sales from premium and business travelers, were SGD$4.4 billion compared with SGD$3.97 billion a year ago.
Singapore Air said it will pay an interim dividend of 20 Singapore cents per share for the six months to September 2008 period.
Singapore Air, which is 55 percent-owned by Singapore's sovereign fund Temasek, said that while fuel prices have retreated from their peaks, volatility in the currency markets presented another challenge.
"With fuel and aircraft-related payments in US dollars, the sharp appreciation of the US dollar and the concurrent depreciation of the Euro, UK pound and Australian dollar, all major revenue currencies for the company, is an adverse development," the airline said.
The global economic downturn and higher costs have also hit other airlines.
SIA's Asian rival, Hong Kong-based Cathay Pacific, warned on Wednesday that potential losses on fuel hedging would contribute to "disappointing" results for 2008. Last week, Cathay said it planned to dispose of five jets from its fleet and warned of slowing bookings.
Air France-KLM in late October became the first major European airline to issue a profit warning since the financial storm broke, while industry group IATA announced bleak traffic figures for carriers worldwide.
Singapore Air shares closed down 7.2 percent on Thursday before it released its results. Its shares are down around 29 percent since the start of the year, outperforming the benchmark Straits Times index's 46 percent fall and rivals Cathay Pacific, down 54 percent, and Qantas which has lost 47 percent.
(Reuters)
Singapore Airlines, the world's largest airline by market value, on Thursday reported a better-than-expected 36 percent fall in quarterly profit and warned of weakness in its advance passenger bookings.
Singapore Air has seen declining passenger demand this year as the global economic slowdown crimps corporate and leisure travel, forcing it last week to announce a cut in flights from the city-state to other Asian cities.
"The financial turmoil around the world and weak consumer confidence are impacting demand for air transportation," said Singapore Air in a statement.
"Although advance bookings for the immediate next quarter are holding up reasonably well, there are signs of weakness beyond that," said Singapore Air, whose USD$9.9 billion market value tops US-based budget carrier Southwest Airlines and Japan's All Nippon Airways.
But the airline has seen some relief on the cost-side as jet fuel traded in Singapore dropped 52 percent to USD$87 per barrel from July's peak in line with a slide in crude oil, allowing the company to cut fuel surcharges this week.
Singapore Air said July-September net profit was SGD$324 million (USD$218.6 million) compared with SGD$508 million a year ago.
Revenues for the airline, which derives about half of its sales from premium and business travelers, were SGD$4.4 billion compared with SGD$3.97 billion a year ago.
Singapore Air said it will pay an interim dividend of 20 Singapore cents per share for the six months to September 2008 period.
Singapore Air, which is 55 percent-owned by Singapore's sovereign fund Temasek, said that while fuel prices have retreated from their peaks, volatility in the currency markets presented another challenge.
"With fuel and aircraft-related payments in US dollars, the sharp appreciation of the US dollar and the concurrent depreciation of the Euro, UK pound and Australian dollar, all major revenue currencies for the company, is an adverse development," the airline said.
The global economic downturn and higher costs have also hit other airlines.
SIA's Asian rival, Hong Kong-based Cathay Pacific, warned on Wednesday that potential losses on fuel hedging would contribute to "disappointing" results for 2008. Last week, Cathay said it planned to dispose of five jets from its fleet and warned of slowing bookings.
Air France-KLM in late October became the first major European airline to issue a profit warning since the financial storm broke, while industry group IATA announced bleak traffic figures for carriers worldwide.
Singapore Air shares closed down 7.2 percent on Thursday before it released its results. Its shares are down around 29 percent since the start of the year, outperforming the benchmark Straits Times index's 46 percent fall and rivals Cathay Pacific, down 54 percent, and Qantas which has lost 47 percent.
(Reuters)
