- POSTED: 30 Jul 2014 18:42
- UPDATED: 30 Jul 2014 23:50
Singapore Airlines has posted a 71 per cent drop in first quarter net profit and warned conditions in the air transportation industry have become more challenging in the face of geo-political concerns and intense competition.
SINGAPORE: Singapore Airlines posted on Wednesday (July 30) a 71 per cent drop in first quarter net profit and warned that conditions in the air transportation industry have become more challenging. SIA, which also operates regional carrier SilkAir and budget airline Scoot, earned S$34.8 million for the three months ended June, down from S$121.8 million in the same period a year ago.
Operating profit fell 52 per cent to S$39 million, while total revenue declined 4 per cent to S$3.68 billion on the back of weaker yields amid intense competition. Travel demand in some key Asian markets had also fallen due to various unforeseen events, the Singapore flag carrier added.
Looking ahead, SIA said the outlook has become "more challenging" with the uncertain global economic climate, geo-political concerns in the region and elevated fuel prices. "Aggressive fares and capacity injections from competitors will continue to place pressure on yields," it added.
SIA, widely regarded as one of Asia's best airlines, faces stiff competition on shorter routes from fast-growing budget carriers such as Malaysia's AirAsia and Indonesia's Lion Air. On longer routes, the threat comes from aggressive Middle Eastern carriers that want to establish their home bases as hubs for travel between Europe and Asia.