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SIA Group's airline fortunes mixed as first-half profit rises

Singapore's SIA Group has generated a one-third improvement in net profit, to S$425 million ($312 million), in the first half of the year.

But the company, which includes Singapore Airlines, Scoot and SilkAir, cautions that yields will remain under pressure, despite a degree of recent stabilisation, over the second half.

SIA Group says its revenues for the six-month period increased by 5.5% to S$7.7 billion.

Passenger yields were down by 3.1% but this was outpaced, the company says, by higher revenues in the sector.

The parent airline company turned in a near-50% rise in operating profit to S$411 million.

SilkAir's operating profit, however, halved to S$21 million while that for budget long-haul division Scoot dropped 70% to just S$5 million.

SIA Group kept its rise in expenditure to 2.7%, a total of S$7.2 billion, stating that a reduction in fuel hedging loss "largely offset" an increase in fuel costs before hedging.

"Fuel prices are expected to remain volatile in the months ahead as the industry outlook for oil demand improves and supply constraints persist," says the company.

Non-fuel costs increased by 3.4% which the group attributes partly to expanded SilkAir and Scoot operations.

SIA's freight division, SIA Cargo, turned around a S$45 million operating loss to post a S$32 million profit, while the engineering operation improved its profit figure to S$38 million.

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