Singapore Airlines: profit up, cuts likely

Capacity cuts to stay competitive amid weak demand

Singapore Airlines has posted a 15.3% increase in operating profits for the third quarter. But it warns it will have to implement capacity cuts to remain competitive amid weak demand.

SIA is facing extremely tough competition on its medium and long-haul markets, from both Gulf carriers and budget airlines.

Singapore Airlines’ operating profit for the quarter ending December 31 was SGD$151 million (€$88 million). Net profit dropped from SGD$142.5 million to SGD$50.1 million, struck down by losses from associated companies and one-off items.

“Advance passenger bookings for the fourth quarter are slightly lagging the planned capacity increase due to the shift in Easter holiday travel demand from March last year to April this year,” SIA said in a statement. “Efforts to stimulate demand to boost loads will continue to place pressure on yields.”

It added that adjustments to flight schedules and capacity would be made to match demand.

Reuters

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