Singapore Airlines (SIA) Group reported a 5.1% net income gain for the half-year ended Sept. 30, but widened losses at its subsidiaries kept the improved financial performance in check.
The group posted first-half 2019-20 net income of SGD206 million ($149 million), up from SGD196 million in the year-ago period. Parent carrier Singapore Airlines saw operating profit rise 11.2% year-over-year (YOY) to SGD465 million, but much of the gain was offset by widening losses at the group’s regional and LCC subsidiaries.
SilkAir incurred a SGD19 million loss for the period, widened from SGD3 million a year ago. The regional carrier’s six Boeing 737 MAX 8s remain grounded, which, coupled with a route transfer to LCC Scoot, resulted in a 1.1% YOY capacity decrease. SilkAir’s MAXs were recently transferred to Australia’s Alice Springs for storage.
Scoot’s loss widened from SGD10 million to SGD77 million YOY. The airline cited higher depreciation from a larger fleet and reduced aircraft utilization, which was aimed at increasing dispatch reliability. Costs increased 8.5% YOY to SGD74 million.
SIA Engineering, the group’s MRO unit, performed better, with an operating profit of SGD37 million, up 76.2% YOY.
Total group revenue rose 5.3% to SGD8.3 billion, supported by RPK growth of 8.6%. Costs were up 5.8% to SGD7.9 billion.
The group’s cargo revenue declined 12.5% to SGD138 million, with yield falling 6.3% amid US-China trade tensions and a slowdown in exports from Europe and Asia.
Looking ahead, SIA Group expects stronger bookings toward the end of the year but said it is wary of intensifying competition in key markets and an uncertain global economic outlook.