The Singapore Airlines Group earned an operating profit of SG$39 million (US$31.2 million) in the first quarter of the 2014-15 financial year, $43 million (-52.4 per cent) lower than last year.  After non-operating and exceptional items, Group net profit was $35 million, down $87 million (-71.3 per cent) over the same period last year.  

Group revenue fell $158 million (-4.1 per cent) to $3,682 million. Passenger revenue declined year-on-year on the back of weaker yields amid intense competition, and unforeseen events that depressed travel demand in some key Asian markets. SIA Cargo recorded lower revenue, notwithstanding a 0.9 per cent improvement in yield, as the airfreight market continued to be affected by excess capacity.  

Group expenditure declined $115 million (-3.1 per cent) to $3,643 million, as fuel and non-fuel costs dipped $68 million and $47 million, respectively.  Before hedging, fuel costs rose by $9 million, which was more than offset by a $77 million improvement in hedging result.  

 SIA Cargo now operates a fleet of eight B747-400s after returning one freighter on expiry of its lease in May 2014.

Looking ahead the group said, “the outlook for the air transportation industry has become more challenging with continuing uncertain global economic climate, geo-political concerns in the region and elevated fuel prices.”

Load factors in the current quarter are expected to be stable year-on-year, but the carrier added that “aggressive fares and capacity injections from competitors will continue to place pressure on yields.” 

Overcapacity in the market will continue to impact the cargo business, notwithstanding a slow recovery in airfreight demand, it said noting that SIA Cargo is targeting specific product segments and traffic lanes to boost performance.