SIA Group profits down

29th Jul 2008

The SIA Group turned in a first quarter net profit attributable to equity
holders of $359 million, a decline of $65 million (-15.4%) from the same quarter in
the preceding year.Group revenue improved $510 million (+14.1%) on the back of growth
in passenger carriage. However, Group expenditure increased by a higher amount of
$630 million (+19.9%) as a result of higher fuel cost.
Expenditure on fuel for the Group rose by $739 million (+64.7%) as fuel
prices reached new highs during the quarter. This was partially mitigated by hedging
gains of $349 million.
Group operating profit at $343 million was $120 million (-25.9%) lower
year-on-year. The operating profit of the Parent Airline Company declined $118
million (-30.8%) from the corresponding period in the previous year, on account of
higher expenditure on fuel which increased 70.6% to $1,557 million. Excluding fuel,
passenger unit cost actually declined 2.2% as increase in non-fuel cost was held at a
rate less than that of growth in capacity produced (7.2% versus 9.4% capacity

Singapore Airlines carried 4.8 million passengers during the quarter, a
year-on-year increase of 3.5%.
Capacity (in available seat-kilometres) expanded by 9.4% over the
same quarter in 2007, with the entry of new aircraft into service. This was not
matched by the growth in passenger carriage (+6.3% in revenue passengerkilometres).
As a result, passenger load factor declined by 2.2 percentage points to
Passenger breakeven load factor rose 0.6 percentage point to 70.2% as
unit cost increased at a faster rate (+8.7%) than yield (+7.8%).
SIA Cargo’s freight traffic (in load tonne-kilometres) was 0.4% higher
compared to last year. As capacity (in capacity tonne-kilometres) grew by a higher
1.6% during the quarter, cargo load factor declined 0.8 percentage point.
Cargo breakeven load factor fell 4.2 percentage points to 61.1%, with
yield growing at a higher rate (+12.8%) than unit cost (+5.5%).

Singapore Airlines took delivery of two Airbus A380-800s, four Boeing
B777-300ERs and decommissioned three Boeing B747-400s during the quarter. As at
30 June 2008, the operating fleet comprised 101 aircraft - 15 B747-400s, 76 B777s,
five A340-500s and five A380-800s, with an average age of 6 years.
Action was taken during the quarter to stop unprofitable routings, with
the decision to suspend the 5 times weekly flights to Osaka via Bangkok from May
2008 and the 4 times weekly flights to Los Angeles via Taipei from October 2008.

The outlook for the airline industry remains uncertain. The price of jet
fuel has risen more than 75% year-on-year, and the strains on financial markets
have not abated.
Under these circumstances, the companies in the Group are tracking
trends closely and are in a good position to react nimbly.



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