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The Straits Times
May 10, 2012
SIA shocker: $38m loss in fourth quarter


By Karamjit Kaur

SINGAPORE Airlines (SIA) incurred an unexpected $38 million loss in the three months from January to March.

It brought earnings for the full financial year to $336 million, a dip of almost 70 per cent on 2010-2011.

The loss also marked the carrier's first quarter in the red in more than two years. Analysts had projected that profits would fall due to high oil prices and weak yields, but the loss surprised many.

SIA said it went into the red mainly due to the cost of disposing of its last Boeing 747-400 aircraft.

Analysts, however, pointed out that even without taking into account the B-747 factor, the group - made up of the parent carrier, its regional arm SilkAir, SIA Cargo and SIA Engineering - suffered an operating loss of $5 million during the quarter.

Total spending for the 12 months ended March 31 increased by 10 per cent to $14.6 billion, mainly on the back of high fuel prices.

Although SIA carried more passengers during the year, stiff competition from other carriers, as well as weak economic growth in some markets, especially in Europe and the United States, put pressure on fares and pushed yields down.

The future has many challenges, the airline said. When he last met reporters and analysts in November, SIA chief executive officer Goh Choon Phong said the problems facing SIA were different from those during the last global financial slowdown in 2008.

Back then, the downturn was sharp but recovery came fairly quickly. Fuel prices also fell significantly.

SIA will pay shareholders a final dividend of 10 cents per share, down from 40 cents a year ago.

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The Straits Times
May 10, 2012
Dark skies for SIA and other airlines

High fuel prices and economic slowdown drag down earnings

By Karamjit Kaur
IF THE outlook is dim for Singapore Airlines (SIA), its rivals are not being spared either.

High fuel prices and weak yields, especially in first and business classes, have hit not just SIA, but other airlines like Qantas and Cathay Pacific as well.

Despite having carried more passengers in the year that ended on March 31, the local carrier said yesterday that profits slid to $336 million - an almost 70 per cent dip from the last financial year.

It was fuel, which typically accounts for more than 40 per cent of an airline's total costs, which evaporated its profits. Last year, the average price of jet fuel was US$133 a barrel, 32 per cent more than in the year before that.

Also feeling the heat, Cathay Pacific yesterday said its first-half earnings will be disappointing due to the uncertain global economic outlook and high fuel prices.

To deal with the slowdown, mainly in Europe and the United States, it will cut capacity and deploy more fuel-efficient aircraft on some of its long-haul routes.

The carrier's chief executive John Slosar said: 'This is not just a Cathay Pacific problem. It's clearly an industry-wide issue; continued high fuel prices in particular are hitting airlines hard across the globe.'

Layoffs may even be on the cards for Australia's Qantas. It announced in February that profits in the second half of last year had plunged 84 per cent to just A$42 million ($54.7 million); at least 500 jobs may be shed.

Analyst Brendan Sobie from the Centre for Asia Pacific Aviation, a think-tank, said Asia's full-service carriers are facing similar challenges.

'The market within Asia remains strong, but this is now primarily served by budget carriers.

'Asia's full-service carriers face increasing competition from budget carriers in the short-haul market, while most long-haul markets have been hit by the global economic situation.'

The challenges are not unique to SIA, but it is more exposed, for example, to competition from low-cost carriers that are more active here than, say, in Japan or Hong Kong.

Aviation analyst K. Ajith of UOB Kay Hian said: 'The problem for SIA is that the long-haul business, which historically has been the major source of its earnings, will continue to be challenging.'

To deal with the slowdown, SIA has asked its more than 1,000 cadets, second and first officers to consider taking from a week to two years off with no pay.

So far, no other austerity measures have been announced.

Mr Tony Sim, who heads the Singapore Airlines Staff Union that represents cabin crew and other rank-and-file staff, said the union will work with the airline to overcome the current difficulties.
Hi buddies, I read reports on SIA being challenged by Emirates and Qatar air on international routes. Anyone could share if SIA has any long term competitive advantage?

The middle east airlines seems strong due to strong backing and probably cheap fuel cost. Hope to hear your views! Big Grin
The Straits Times
www.straitstimes.com
Published on Nov 06, 2012
SIA focuses on all sectors to stay aloft amid challenges

Rest of the year will be tough but group will stay nimble, says CEO

By karamjit kaur aviation correspondent

Singapore Airlines will fight on all fronts - from premium to budget - in its bid to stay aloft amid challenging operating conditions.

It will focus on and invest in all segments of the business to cushion itself against a slowdown in any one sector, said its chief executive officer Goh Choon Phong.

This will also strengthen the group against rivals at both ends of the market, he added yesterday during his biannual post-results session with journalists and analysts.

Last Friday, SIA announced that second-quarter (July to September) net profits had dived 54 per cent to $90 million from the same period last year.

SIA Cargo reported an operating loss of $99 million for the first two quarters.

Mr Goh noted that the rest of the year will be tough, with high fuel prices and weak demand, especially in Europe, but SIA will deal with the crisis by staying nimble and flexible.

A key strategy he has been pushing since becoming CEO about two years ago is growing a portfolio of carriers.

The parent carrier and regional arm SilkAir serve premium customers, while long-haul airline Scoot - launched in June - and Tiger Airways, which SIA owns a third of, focus on the budget sector.

It is critical to keep the two segments distinct to lower the risk of cannibalisation, Mr Goh said.

"If there is any cannibalisation, we believe that, firstly, other low- cost carriers will be affected by Scoot and its partner airlines."

The next level will affect other full-service carriers "that may not be at as premium a position as SIA is", Mr Goh said.

karam@sph.com.sg
There are many other airlines that have been hit by low cargo volume (such as KLM-AF, American carriers and Atlas). The Baltic Dry Index has been declining for quite a while now as well. Things are not looking good. Are these signs of a global economic slow down?
if only SIA is part of changi airport group or vie-versa, how nice will it be? hehe
(Reuters) - Delta Air Lines Inc said it was buying Singapore Airlines Ltd's 49 percent stake in Virgin Atlantic for $360 million, ending the Asian airline's disappointing 12-year investment in the British carrier.
The sale by Singapore Airlines, 56 percent owned by state investor Temasek , underscores its reduced reliance on battered long-haul routes to Europe and the United States and its deeper focus on Asia.
The sale by Singapore Airlines came after sources familiar with the matter said Delta, the second-largest U.S. airline by operating revenue after United Continental Holdings , wants to gain access to Virgin's landing rights at London's Heathrow airport.
Heathrow is a lucrative hub for corporate passengers where landing slots are hard to acquire.
The deal, which Delta said would lead to a trans-Atlantic joint venture with Virgin Atlantic, is subject to regulatory clearance in the United States and Europe.
Singapore Airlines bought 49 percent of Virgin Atlantic for 600 million pounds in 1999, but wrote off goodwill amounting to 96 percent of its purchase price of Virgin.
I was at SIA office at Ion Orchard yesterday to change my flight and struck up a conversation with a British lady. She complained that the premium commanded by SIA does not seem justified when compared to Qatar or Emirates, especially on long haul flights. There seems to be an concerted attempt to price themselves at a premium... the KF programme sucks and you can't really get much out of them. If your flight had some problems (e.g non functioning seat/KrisWorld), they only give you 200 bucks duty free voucher... and she got back the same seats on her return flight.

Her observations are also mine; had experienced the same thing and I don't really see why I should fly SIA now at a higher cost, other than company paying for.
SIA asks pilots to volunteer for unpaid leave

" Saturday, Jan 05, 2013
SINGAPORE - Singapore Airlines (SIA) has asked its captains to volunteer for unpaid leave amid a global economic slowdown that has dented long-haul travel demand, the airline said on Saturday.

The move came nearly a year after the company - considered a bellwether for the full-service airline industry - made a similar offer to its first officers.

The airline has also frozen its intake of cadet pilots as part of a slew of cost-cutting measures.

"Singapore Airlines began offering voluntary no-pay leave to first officers in March last year and subsequently to captains who expressed interest," company spokesman Nicholas Ionides said in a statement emailed to Agence France-Presse. "
(11-12-2012, 09:45 PM)LionFlyer Wrote: [ -> ]Her observations are also mine; had experienced the same thing and I don't really see why I should fly SIA now at a higher cost, other than company paying for.
I think Qatar safety track record is also quite good. But in the event of an accident, what is Qatar compensation compared to SIA? I know SIA compensation is pretty good if a fatal accident occurs. Of course, only the victim's family or relatives will benefit.
(05-01-2013, 09:08 PM)Bibi Wrote: [ -> ]
(11-12-2012, 09:45 PM)LionFlyer Wrote: [ -> ]Her observations are also mine; had experienced the same thing and I don't really see why I should fly SIA now at a higher cost, other than company paying for.
I think Qatar safety track record is also quite good. But in the event of an accident, what is Qatar compensation compared to SIA? I know SIA compensation is pretty good if a fatal accident occurs. Of course, only the victim's family or relatives will benefit.

Seems to be the same, following Warsaw Convention. I don't see this as a big factor in a choice between two carriers.

SIA
http://www.singaporeair.com/jsp/cms/en_U...notice.jsp
Quote:Note: The limits of liability of US$75,000.00 above are inclusive of legal fees and costs, except that in case of a claim brought in a state where provision is made for the separate award of legal fees and costs, the limit shall be the sum of US$58,000.00 exclusive of legal fees and costs.

Qatar Airways
http://www1.qatarairways.com/global/en/c...tions.html
Quote:(a) The limit of liability for each Passenger for death, wounding or other bodily injury shall be the sum of US$ 75,000 inclusive of legal fees and costs except that, in case of a claim brought in a State where provision is made for separate award of legal fees and costs, the limit shall be the sum of US$58,000 exclusive of legal fees and costs.