Singapore Airlines’ second-quarter net profit jumped by 78% to S$160 million ($126 million) in the company’s fiscal year 2013-14 ended 30 September.
The carrier, in a stock exchange statement, attributed the improvement to higher operating profits from the parent airline, its share of profits from group companies and aircraft sales. Group operating profit for the quarter was S$87 million, up by 24% from a year earlier.
Second quarter revenue rose by 2.8% to S$3.9 billion on a 5% increase in passenger traffic, although this was partially offset by a decline in yields.
“Promotional activities undertaken amid intense competition and the continued strength of the Singapore dollar against major revenue-generating currencies drove yields down by 3.5%,” said SIA.
Expenditure was up by 2.4% to $3.8 billion, mainly because of higher staff and non-fuel variable costs.
Three of the group’s four primary companies enjoyed improved operating profit. The parent airline’s operating profit rose by S$13 million to S$97 million, while SIA Engineering’s operating profit fell by S$4 million to S$28 million and SilkAir’s operating profit declined by S$11 million to S$8 million on the inability of passenger demand to fill increased capacity.
SIA Cargo suffered an operating loss of S$31 million in the quarter, but this was an improvement on its S$50 million operating loss last year.
During the second quarter, SIA received two Airbus A330-300 and two Boeing 777-300ER aircraft. It sold one 777-200, decommissioned another 777-200 for lease to Scoot and decommissioned an Airbus A340-500 for sale to Airbus.
At the end of the second quarter, SilkAir’s fleet comprised 23 Airbus A320 family aircraft. In October, it received the last A320-200 it had on order.
Scoot’s operating fleet comprised five 777-200s as of 30 September and the low-cost unit took delivery of an additional 777-200 in October.
Looking forward, SIA expects continued weakness for air cargo demand and fuel prices to remain “high and volatile”.
“Advance bookings for the coming months are projected to be higher compared to the same period last year on the back of efforts to boost loads,” says SIA. “However,ongoing promotional activities necessitated by intense competition and a strong Singapore dollar are expected to place pressure on yields.”