Destination
Singapore Airlines posts HY profit slump; sees USD 832 million gain from Air India-Vistara merger, BA
Singapore Airlines reported a slump in half-year earnings on Friday, reflecting stiff competition and higher costs, but added that it will post a gain of SGD 1.1 billion (USD 832.45 million) once the Air India-Vistara merger is completed. The city-state’s flag carrier is expecting the merger between Tata Group’s Air India and Vistara, a joint venture between Singapore Airlines and Tata, to be completed by the end of November.
The airline will recognize a non-cash accounting gain post the completion. Singapore Airlines (SIA), which is set to get a 25.1 per cent stake in Air India, will inject SGD 498 million into the new combined entity, it said on Friday.
The island nation’s leading airline operator posted a 48.5 per cent plunge in net profit to SGD742 million for the April-September period and declared an interim dividend of 10 Singapore cents per share.
“Increased capacity and stronger competition in key markets led to yield moderation, resulting in lower operating profit,” Singapore Airlines said. Airlines globally have ramped up the number of flights and routes to cater to robust air travel demand, which has resulted in increased competition, putting pressure on ticket prices and squeezing profit margins.
SIA’s total expenses rose to SGD8.70 billion for the half-year ended September 30, a 14.4 per cent rise, due to a jump in both fuel and non-fuel costs. Revenue rose by 3.7 per cent from a year ago to SGD9.50 billion. Passenger load factor – a measure of how many seats are filled on planes – was 86.4 per cent in the first half for the group as a whole, compared with 88.8 per cent a year earlier.
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