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SIA transformation effort lifts full-year profits

Singapore Airlines' full-year operating profit has surged by more than 80% to S$703 million ($524 million), but that for its SilkAir division more than halved to S$43 million.

The low-cost division Scoot generated a 15% profit rise, the company's newly-disclosed financial statement shows.

Singapore Airlines, in particular, turned around a fourth-quarter loss in 2016-17 to generate an operating profit of S$137 million for the three-month period.

It says its performance was lifted by early results from "transformation initiatives", adding that it benefited from implementing a new revenue-management system, centralised pricing operation, and a new fare-pricing structure.

Overall group revenues rose by 6.3% to S$15.8 billion but efficiency measures, including efforts to cut fuel-burn, kept the increase in expenditure to 3.5%, a total of S$14.7 billion.

Fuel costs rose by 4% to S$3.9 billion for the year.

SilkAir's revenues increased by 3%, but higher passenger numbers were offset by an 11.5% contraction in yield. Capacity hikes resulted in higher fuel and variable costs, and expenditure increased by nearly 10%.

Freight division SIA Cargo, which just managed to break even at operating level last year, turned in a healthier operating profit of S$148 million, as cargo yield and freight carriage improved.

Singapore Airlines' maintenance arm, SIA Engineering, generated a slightly higher operating profit of S$76 million – despite a S$9 million decline in revenues.

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