Singapore Air reports third quarter decline
The Singapore Airlines (SIA) has said that its net profit fell an annual 42.8 percent in the third quarter to December as it carried fewer passengers and cargo due to the global economic downturn. SIA, one of Asia’s major airlines, forecast a bleak outlook for this year, confirming projections by economists that the global economic situation will worsen before improving. The airline became the latest major carrier to report a big profit fall or losses during the global economic slowdown, which has hurt travel worldwide.
Net profit came in at 337 million Singapore dollars (225 million US), from 590 million dollars, on revenue of 4.16 billion dollars which was down 2.6 percent year on year, the airline said in a statement. SIA said it carried 4.8 million passengers in the October to December period, down 4.2 percent from the same quarter the year before as travel demand took a hit.
"Demand for air transportation is expected to remain weak for much of 2009," SIA warned. "The company will continue to monitor the patterns of demand and make appropriate adjustments to flight schedules and capacity while managing costs tightly."
SIA announced late last month the suspension of some international flights, saying it did not want to fly half-empty planes around the world. Flights to India, Southeast Asia, the United States and Europe were among those affected. The airline said it was also reducing its all-business-class service to New York and Los Angeles.
In its statement Tuesday, SIA said group expenditure rose 5.7 percent, as gains from declining jet fuel prices were eroded by hedging losses totalling 341 million Singapore dollars.
"Foreign exchange rate movements lowered operating profit by 144 million dollars as major revenue generating currencies, particularly the Australian dollar, the UK pound and the euro, weakened against the Singapore dollar, even as the Japanese yen and the US dollar strengthened," it said.
The region was the airline industry’s booming market in recent years but its international passenger traffic fell 9.7 percent in December over the previous year, the sharpest decline in any region, the International Air Transport Association (IATA) has said.
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