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Singapore Airlines is diverting profits despite recorded revenue



SINGAPORE: On Thursday (May 16), Singapore Airlines Ltd reported its highest annual revenue on jumping in passengers, although higher fuel costs have almost halved its profits.

Revenue increased by 3.3 per cent to S $ 16.32 billion for the year ending March 31, as the number of passengers carrying jumped 7.2 per cent.

A passenger load factor arose for the group's carriers, including Singapore Airlines, SilkAir and Scoot, to 83 per cent.

The net profit of the aviation group fell by 47.5 per cent to S $ 682.7 million from S $ 1.3 billion a year earlier, when the figures were restated to reflect accounting changes.

Group expenditure increased by 7 per cent or S $ 999 million with a higher net fuel cost contributing two thirds of the increase.

Fuel expenditure climbed 17.6 per cent, or S $ 688 million, as jet fuel prices rose by an average of 21.6 per cent during the year, the airline said.

Oil prices have been rising due to increasing tensions between the US and rich Iran.

He added that "net funding payments have increased … as the group raised more loans during the year for aircraft purchases".

Some of the costs arose from the refurbishment of its regional wing SilkAir, which changes from Airbus to a Boeing aircraft, as well as the costs of restructuring as it prepares to combine SilkAir with the parent airline.

READING: Singapore Airlines is planning extensive initiatives to regain market leadership.

The airline said airplanes that included BoAing 737 MAX 8 aircraft operated by SilkAir, and issues with Rolls-Royce machines that powered its 787 Dreamliner fleet, had hit passenger capacity.

SilkAir based his 737 MAX 8 aircraft in March after an Ethiopian Airlines aircraft collapsed, killing all 157 on the board. This was the second fatal accident for the MAX 8 passenger jet in six months, after an accident in Indonesia.

READ: Singapore Base Boeing 737 MAX plane after 2 fatal accidents

READ: SilkAir breaks 4 journeys in the second wave of cancellation in the middle of Boeing 737 MAX 8

The national carrier said orders in the coming months showed strong demand, but warned against the impact of trade disputes and slowed economic growth in key markets.

He said most key markets continued to grow at a healthy pace, including the US, Japan, Indonesia and New Zealand. However, China's international traffic growth rates have softened.

Singapore Airlines predicts passenger capacity growth of 6 per cent, lower than the 6.4 per cent recorded in the last financial year, to be weighed by issues relating to it. Boeing fleet 737 MAX 8 and Rolls-Royce Trent 1000 TEN.

The carrier last month also based two Boeing 787-10 jets with Rolls-Royce TC 1000 TEN 1000 PLC engines after inspections of his fleet found premature deterioration to the blade.

The group is keen to assure customers that the safety of its passengers and its crew is of the utmost importance, and only aircraft and machines that are certified fit to fly will be they returned to the service, "he said.

The board recommended a final dividend of 22 cents per share for the financial year.


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