SIA maintains income levels: FY05
May 10, 2006
Record revenue and a commitment to cutting costs helped Singapore Airlines Group reduce the impact of soaring fuel prices to record a massive S$1.24 billion ($791.3 million) profit for the fiscal year ended March 31, just 8.3% down on the previous year.The group enjoyed an 11.1% hike in revenue to S$13.34 billion. Operating profit fell 7.9% to S$1.21 billion as rising fuel costs hit the bottom line. Expenditures increased 13.4% to S$12.13 billion with fuel accounting for 35%, up from 25.2% in the previous fiscal year. Excluding fuel, costs dipped 1.4%, the result of productivity gains and cost management programs. The group also suffered a foreign exchange loss of S$137 million, a reversal of a S$112 million gain in FY05 that was offset by revised accounting standards that resulted in a net addition of S$279 million.
Singapore Airlines' operating profit slipped 6.7% to $651 million. The airline made up 53.6% of the group's operating profit, while Singapore Airlines Cargo contributed 14.3%, Singapore Airport Terminal Services 15.2% and SIA Engineering Co. 11.1%.
SIA carried a record 17 million passengers during the year, up 6.6%. RPKs grew 6.6% to 82.74 billion and ASKs rose 4.6% to 109.48 billion, lifting load factor 1.5 points to 75.6%. Unit costs increased 7.1% to S$7.5 cents, wiping out a 5% improvement in yield to S$10.6 cents.
The group sees the outlook for the current year as positive but fuel prices remain a "significant challenge." SIA will be looking to grow as it takes delivery of seven A380-800s and nine 777-300ERs in the 2006-07 year, although those deliveries will be offset somewhat by retirement of five 747-400s. The carrier announced that a fleet plan had been presented to the board, which authorized "final negotiations to be entered into with the manufacturers." No further details were provided.