Singapore Airlines profit slides

Sunday, 10 May, 2006 0

Singapore Airlines suffered its fifth straight quarter of lower profits due to record fuel costs and said the soaring price of jet fuel was its main headache.

Singapore Air spent SGD$1.12 billion (USD$714 million) on jet fuel for its 90 aircraft in the three months to March — or more than four times as much as its net profit of SGD$266.3 million (USD$169.8 million) for the same period.

The airline faces “runaway fuel prices”, Chief Executive Chew Choon Seng said on Tuesday after it posted a 7.1 percent drop in profit for its financial fourth quarter despite a 12 percent increase in revenues.

For the full year to March, the state-controlled airline reported a net profit of SGD$1.24 billion (USD$790.5 million) — down 8.3 percent on the previous year.

Its annual fuel bill was SGD$4.24 billion (USD$2.7 billion), up 57.5 percent from a year ago and higher than ever before.

Even with the rocketing cost of fuel, Singapore Air — unlike many other airlines — has never made an annual loss.

CEO Chew also said that the airline had no immediate plans for its 49 percent stake in Virgin Atlantic, which is majority-owned by British entrepreneur Richard Branson. “We participate actively at board level in Virgin Atlantic… (and) still aim to take it public at some point.”