Emirates, SIA in profit slump
Two of the world’s leading airlines, Singapore Airlines and Emirates, both saw a sharp fall in profits during the first half of the 2011-12 financial year.
Singapore Airlines’ profit of S$394 million was 62 percent lower than the same period a year ago, principally on account of high fuel costs.
Operating profit declined to $134 million, 78 percent lower than the first half of the previous financial year.
Expenditure on fuel increased $747 million (+35%) as jet fuel prices spiked 45 percent over the same period last year, SIA reported.
This was partially offset by a S$118 million year-on-year improvement in fuel hedging.
Looking ahead, SIA said the prevailing economic uncertainty and weak consumer confidence were impacting demand for air transportation. “Advance passenger bookings are showing signs of weakness, particularly in Europe and the United States.â€
The airline this week detailed its plans to launch a low-cost long- haul unit, called Scoot, to fend off competition from Jetstar and Air Asia for budget travelers.
Dubai-based Emirates airline reported net profits of Dh827 million (US$225m) for the first six months of its current financial year ending September 30.
This is 75 percent down compared with a net profit of Dh3.4 billion ($925m) during the corresponding period last year.
Rising fuel prices and fluctuating exchange rates resulted in Emirates paying $1billion more in fuel costs over the same period last year, the airline said.
Ian Jarrett
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