SINGAPORE (Nov 13): Singapore Airlines reported a 81% fall in 2Q19 earnings to $56.4 million from $293.3 million in 2Q18, as fuel prices jumped 40%.
Revenue for the quarter increased to $4.06 billion, compared to $3.85 billion in the previous year.
The flagship carrier reported a 4.2% increase in revenue on the back of passenger carriage growth, but this was offset by higher fuel costs and other expenditure.
SilkAir and Scoot reported operating losses, as the increase in fuel and expansion costs outpaced revenue growth.
SilkAir reported a 2.1% improvement in passenger flown revenue on a 6.0% increase in passenger traffic, but this was insufficient to mitigate a $10 million rise in net fuel cost, among other cost increases.
Passenger revenue for Scoot rose 23.4% y-o-y, driven by a 21.5% increase in carriage on capacity growth of 18.3%, but this was offset by higher fuel and other costs.
Total expenditure for the period was 9.7% higher at $3.83 billion from $3.49 billion a year ago mainly due to fuel costs increasing to $1.16 billion from $930.4 million last year.
Hence, operating profit for 2Q19 dropped 34.7% to $232.9 million from $357.1 million a year ago.
For 2H19, earnings came in at $196.0 million, a significant fall from $631.2 million in 2H18.
The group is declaring an interim dividend of 8 cents per share, which will be paid to shareholders on Dec 4.
On the outlook, the group expects the coming months to see higher y-o-y booking. But headwinds continue to persist as fuel prices are higher y-o-y, as well as keen competition in key operating markets.
Amid continuing challenges in the operating environment, the group says that it remains committed to its three-year transformation programme to enhance customer experience, grow revenue and improve operational efficiency.
Shares in SIA closed 17 cents or 1.77% lower at $9.42 on Tuesday.
