SINGAPORE: SIA and EVA to buy shares in China Cargo leftovers
Singapore Airlines (SIA) said its third quarter net profit fell 28.6 per cent from a year earlier as a result of setting aside money to pay fines for alleged price fixing by its cargo unit, while adding that thinning advance passenger bookings and rising fuel costs are dampening its outlook. Net profit for the three […]
March 1, 2011
Singapore Airlines (SIA) said its third quarter net profit fell 28.6 per cent from a year earlier as a result of setting aside money to pay fines for alleged price fixing by its cargo unit, while adding that thinning advance passenger bookings and rising fuel costs are dampening its outlook. Net profit for the three months ended 31 December fell to S$288.3 million (US$225.4 million) from S$403.7 million a year earlier, the airline said in a statement. SIA said operating profit in the quarter was 58 per cent higher on year at S$509 million while group revenue grew 12 per cent to S$3.84 billion. Expenditure rose 8 per cent to S$3.33 billion. SIA Cargo reported an operating profit of S$48 million, up 18 per cent over the same period last year.
A S$199 million provision for fines from alleged cargo price fixing weighed heavily on Singapore Airlines’ third quarter profit. Looking ahead at its cargo business, SIA said “regional differences will continue to be marked in 2011 with strength in Asia Pacific and uncertainties in Europe markets. Growth for airfreight is expected to continue for the rest of the financial year, albeit at a slower rate.” The group’s exceptional items of S$199.1 million comprised provision made for fines payable by SIA Cargo as imposed by the European Commission (S$135.7 million), the South Korean Fair Trade Commission (S$3.6 million) and the US Department of Justice Antitrust Division (S$62.5 million), the carrier said, adding it has appealed against the decisions by European Commission and the Korean body. For the nine months to December 2010, Singapore Airlines recorded net profit of S$921 million, a turnaround from the S$62 million loss in the same period the previous year, it said. Group revenue rose 17 per cent to S$10.94 billion while expenditure rose at a slower rate of 3 per cent to S$9.83 billion. In November, the European Commission fined 11 air cargo carriers a total of €799 million for price fixing in cargo services. Singapore Airlines had contested that it was involved in a global conspiracy to fix surcharges or rates. In the following month, the carrier said it had agreed to pay an antitrust fine to the US Department of Justice, bringing to close an investigation into an alleged conspiracy to fix prices from 2002 until at least February 2006. Excluding the fines, net profit rose 21 per cent, the group said. On its outlook, it said: “As airlines including SIA continue to inject capacity, advance passenger bookings for the final quarter of the 2010-11 financial year are levelling off.” During the quarter, Singapore Airlines took delivery of two Airbus A330-300s, taking its operating fleet to 109 aircraft as at 31 December with an average age of six years and two months.