SQ warns of bleak outlook

SINGAPORE, 17 May 2013: Singapore Airlines said Thursday its net profit in the year ending March rose 12.8%, boosted by surplus from the sale of aircraft, spares and spare engines, but warned the outlook remained bleak.

Net profit was S$379 million (US$302.6 million) on revenue of S$15.10 billion, up 1.62%, the carrier said in a statement.

For the fourth quarter, net profit was at S$68.3 million, swinging back from a S$38.2 million loss in the same period last year.

SIA attributed the rise in full-year and fourth quarter net profit mainly to “surplus on the sale of aircraft, spares and spare engines”.

Fuel costs, which accounted for nearly 40% of expenditures, remained a drag on profits.

SIA said passenger numbers rose 7.3% boosting revenues, but promotional schemes to fend off intense competition and the depreciation of revenue-generating currencies against the Singapore dollar dented yields.

“The global economic outlook remains uncertain with the ongoing weakness in the eurozone and the sluggish recovery in the United States,” the airline said.

“Forward passenger bookings for the next few months are almost flat compared to the same period last year,” it added.

It also warned about overcapacity in the cargo market that it said would pressure loads and yields, as well as the impact of continued high fuel prices.

The airline however said its strong financial position “will enable it to weather the many challenges and allow for continued investment in product and service enhancement.”

Sourced: ttrweekly