SIA Group profit nosedives

THE SINGAPORE Airlines (SIA) Group recorded significantly lower half-year earnings, as higher jet fuel prices took a toll on the company’s bottom line.

The Group, which consists of flag carrier SIA, SilkAir, SIA Engineering and SIA Cargo, posted net profit of S$239 million (US$188.5 million) for the first half of financial year 2011-12, a 62 per cent drop from the S$633 million generated a year ago.

The Group attributed the decrease in profits to increased expenditure on fuel, which shot up by S$747 million (+35 per cent) as jet fuel prices spiked 45 per cent over the period.

Group revenue, in the meantime, rose S$180 million to S$7.2 billion, a three per cent hike.

Broken down into subsidiary performance, SIA’s operating profit for the first half of financial year 2011-2012 fell 86 per cent to S$53 million, compared to S$380 million the year before.

Even though the airline carried a total of 8.5 million passengers (a year-on-year increase of 3.3 per cent), growth in passenger carriage was slower than expansion in capacity, resulting in a 1.9 percentage point dip in load factor to 77.5 per cent.

Meanwhile, SilkAir recorded operating profit of S$34 million for the first half, compared to S$36 million the year before. As a result, load factor was flat at 74.2 per cent.

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