Singapore Airlines' net profit nearly triples in Q2
The first Airbus SE superjumbo to exit service will be stored minus its engines at a French airfield next week as its owner seeks a new operator for a plane that while still relatively young in industry terms has fallen out of favor with airlines.
The A380 will be returned to leasing firm Dr. Peters after 10 years of service with Singapore Airlines Ltd., the model’s first customer. With Airbus struggling to win orders for the doubledecker and no second-hand market established, the aircraft will be parked at Tarbes in the foothills of the French Pyrenees.
Dr. Peters, which owns four A380s, told Bloomberg that talks with potential new users of the plane continue and that it remains “optimistic” about agreeing a deal. At the same time, the jet’s engines will be removed and returned to their manufacturer Rolls-Royce Holdings Plc. for rental to other operators in a move that could buy the aircraft time or prove a prelude to its scrapping.
Three more Singapore Air A380s are set to return to Dr. Peters in January, April and June next year, with a fourth to be sent to Doric, another leasing firm, in March. The aircraft are being retired as the Asian carrier takes delivery of five new superjumbos to bring down the average age of the fleet and offer the latest through-life enhancements.
Storing an A380 with no new operator in sight represents a setback for Airbus as it seeks to save the program through the sale of about 20 new planes to Emirates, the largest operator of the model. That deal could come next week
SINGAPORE (Reuters) – Singapore Airlines said its second-quarter net profit nearly tripled on the back of stronger operating results, helped by a rebounding cargo business, but yields remained under pressure as competitors increased capacity.
The carrier, a benchmark for Asia's premium airlines, earned S$190 million ($139 million) in the three months to Sept. 30, up from S$65 million a year before, it said on Tuesday.
"Headwinds remain as competitors mount significant capacity in key markets. Yields continue to be under pressure, despite some stabilization in recent months," the airline said.
The airline and Hong Kong-based rival Cathay Pacific Airways Ltd have been struggling against mounting global competition from Chinese and Middle Eastern rivals and low-cost carriers, with no domestic flights to underpin their earnings.
Passengers travelling with Singapore Airlines increased by 2.3 percent in the second quarter and the carrier's secondquarter operating profit rose to S$232 million, at the Dubai Air Show and would help shore up build rates that have been repeatedly cut as orders dry up.
Airbus struck a blank on selling new A380s last year and has offered to revamp the model with fuel-saving winglets and 80 extra seats on top of the standard 550 to improve its appeal.
Tarbes-Lourdes-Pyreenees airport, located 75 miles from Airbus’s Toulouse headquarters in southwest France, is a popular parking site for jetliners. Tarmac Aerosave, Europe’s biggest aircraft storage company, says it can accommodate 25 planes there and hundreds more at Teruel, Spain. (Bloomberg) from S$109 million a year earlier.
Singapore Airlines itself contributed S$170 million to group operating profit in the quarter, up from S$79 million a year earlier, while the SilkAir unit's operating profit fell 17.6 percent to S$14 million, and that of low-cost subsidiary Scoot's declined by 75 percent to S$2 million.
The cargo division reported an operating profit of S$26 million, rebounding from an operating loss of S$11 million a year ago amid a strong recovery in the freight market globally.
Singapore Airlines is undertaking a three-year transformation plan designed to make its business more competitive after reporting a surprise fourth-quarter loss in May.
Last week it said it would spend $850 million to increase the overall seat count by up to a quarter in its fleet of A380 superjumbos and halve the number of first class seats to combat lower airfares and boost competitiveness.
The company's management team will hold a detailed briefing for investors and media on Wednesday.