High fuel prices slash profits at Singapore Airlines

3rd Nov 2011

Singapore Airways has reported a net profit of $239 million in the first half of the 2011-12 financial year, 62 per cent lower than the same period a year ago.

The fall was principally on account of high fuel costs, the carrier said in a statement to markets earlier.

Operating profit declined to $134 million, $462 million lower than the first half of the previous financial year.

Group revenue grew three per cent to $7.3 billion, supported by higher passenger carriage and flat yields, despite increased competition and weak business sentiment.

Expenditure on fuel increased $747 million as jet fuel prices spiked 45 per cent over the same period last year.

This was partially offset by a $118 million year-on-year improvement in fuel hedging.

Following the release of the results, Singapore Airlines declared an interim dividend of ten cents per share.

Looking forward, Singapore Airlines said: “The prevailing economic uncertainty and weak consumer confidence are impacting demand for air transportation.

“Advance passenger bookings are showing signs of weakness, particularly in Europe and the United States.

“Global Purchasing Manager Indices have also fallen, pointing to weaker demand for air freight.

“Both passenger and cargo yields are therefore expected to remain under pressure.”


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