SIA profit plunges, outlook weakens
Soaring jet fuel prices and economic uncertainty in the key markets of Europe and the United States is clouding the outlook for Singapore Airlines.
SIA’s first quarter profit slumped 82 percent from a year ago while forward bookings are looking flat.
“High fuel cost will remain the biggest challenge for the group in the coming months,” SIA said in a statement.
Singapore Airlines posted a net profit of S$44.7 million in the quarter ended June 30, compared to S$252.5 million a year ago.
SIA said it has been adjusting its capacity by reducing frequency on the all-business-class non-stop flight between Singapore-Los Angeles while adding capacity to more popular destinations in Asia such as Hong Kong, Guangzhou, Taipei and Mumbai.
The International Air Transport Association (IATA) this week cut 2011 profit forecasts for the world’s major airlines by more than half to $4 billion as high oil prices and turmoil in Japan, North Africa and the Middle East weigh on the industry’s recovery.
Ian Jarrett
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