SIA Cargo revenue down despite yield gain

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.


SIA Cargo revenue down despite yield gain


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 $3.68 billion while 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, the carrier said.

Group expenditure declined $115 million (-3.1 per cent) to $3.64 billion, 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.

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