SIA Engineering's fiscal first quarter net profits fell 23.2% to S$45.1 million ($31.3 million) due to falling maintenance, repair and overhaul revenues.
The maintenance arm of Singapore Airlines (SIA) says that revenues fell by S$6 million, or 2.4%, to S$244.2 million "mainly due to lower aircraft maintenance and component overhaul work". This was somewhat mitigated by an increase in the rectification and cabin maintenance work, and higher revenues from material usage.
Expenditure remained flat at S$231.9 million, with lower staff costs offset by higher material costs and unrealised foreign exchange losses due to a weaker US dollar.
"The group's weaker first quarter results reflect the downturn in airline travel and cargo demand. With continued uncertainties in global economic conditions and the impact of the H1N1 situation, the group's performance will continue to be affected until there is sustained recovery in demand," says SIA Engineering, which is listed separately from its parent on the Singapore stock exchange.
"The company has taken measures to trim costs. These include rationalisation of the workforce and shift patterns, management wage cuts and employee leave arrangements to better match demand. The group's 23 subsidiary, joint venture and associated companies have also taken the necessary steps. The group will closely monitor the operating environment and be ready to implement such additional measures as may be necessary."
Source: Air Transport Intelligence news