SIA reports S$138m net loss in Q4

SINGAPORE: Singapore Airlines (SIA) yesterday reported a net loss in the fourth quarter, causing full-year profit to drop more than half as intense competition continues to buffet the carrier.

SIA has been battling strong competition from Asian low-cost carriers and Middle Eastern airlines, which now boast modern fleets and top-quality inflight services.

It said in a statement that a “wide-ranging review” of the company’s network, fleet, products, services, organisational structure, and processes is underway to better position the airline for the future.

The carrier said it suffered a net loss of S$138.3 million (RM430.7 million) in the fourth quarter to March as operating profit tumbled and the airline made a provision for its cargo business.

For the full-year, net profit came in at S$360 million, down 55.2 per cent from the previous year, with annual revenue easing 2.4 per cent to S$14.87 billion.

“Intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields,” said the company. A rebound in jet fuel prices also eroded earnings as the average price for Singapore Jet Kerosene climbed from its low of US$37.90 (RM164.24) a barrel in January last year to US$61.9 in March this year.

“The size of the loss is quite staggering for the three months and it would indicate that SIA would need to do something drastic and radical to overcome its difficulties in the coming years,”said aviation analyst Shukor Yusof of Endau Analytics, noting that profits in the previous quarters had been on the decline.