SIA may post Q1 fall<\/p>\n
Bloomberg, Singapore<\/p>\n
Singapore Airlines Ltd., Asia's most profitable carrier, may
\nreport its first profit decline in eight quarters this week due
\nto record jet fuel prices and expansion by low-fare competitors.<\/p>\n
Net income probably slumped 54 percent to S$219 million
\n(US$133.7 million) in the fourth quarter ended March, from
\nS$477.9 million in the same quarter last year, according to a
\nmedian estimate of eight analysts surveyed by Bloomberg News.<\/p>\n
The airline will announce its earnings on Wednesday.<\/p>\n
The price of jet fuel surged 51 percent to an average $57.57 a
\nbarrel in Singapore in the quarter ended March, forcing Singapore
\nAirlines, Cathay Pacific Airways Ltd. and other Asian carriers to
\nimpose surcharges.<\/p>\n
Costlier fares drove passengers to opt for discounts by
\nValuair Ltd. and 14 other low-fare airlines that fly in Asia,
\nfive times more than the same period last year.<\/p>\n
High fuel price \"is definitely having an effect on cost,\" said
\nMark Tan, who owns Singapore Airlines' shares among the $3.5
\nbillion he manages at UOB Asset Management Ltd. in Singapore.
\n\"Fuel surcharges will not be enough to cover the cost.\"<\/p>\n
Global airlines may have to pay $76 billion for jet fuel in
\n2005, a fifth more than last year's $63 billion, according to the
\nInternational Air Transport Association. Fuel cost can account
\nfor as much as 40 percent of an airline's operating expense.<\/p>\n
Jet fuel price surged to a record $76.38 a barrel in Singapore
\non April 4, according to the Platts pricing service.<\/p>\n
The price rose 51 percent in the three months ended March to
\nan average of $57.57, from $38.23 a year earlier. It fell 1
\npercent to $66.75 a barrel on May 6.<\/p>\n
Fuel made up 28.5 percent of Singapore Airlines' costs in the
\nquarter ended December, its largest expense.<\/p>\n
Singapore Airlines on April 22 raised its fuel surcharge for a
\nthird time to help cover rising fuel costs. The surcharge rose to
\n$10 from $4 per passenger for flights between Singapore and Kuala
\nLumpur from May 1.<\/p>\n
The airline also raised its levy for so- called long-haul
\nflights to $30 from $22 starting May 6.<\/p>\n
\"At $70 per barrel, the additional fuel cost to the airline
\nwill be in excess of $300 million for the fiscal year\" that ends
\nin March 2006, the carrier said.<\/p>\n
The carrier in October said it plans to hedge 45 percent of
\nits fuel volume in the second half of the year ended March 31.<\/p>\n
Singapore Airlines, 57 percent owned by Singapore's state
\ninvestment unit Temasek Holdings Pte, faces competition from
\nfull- service carriers and discount airlines that are both
\nexpanding.<\/p>\n
Competition for so-called premium flyers comes from full-
\nservice carriers such as Malaysian Airline System Bhd., which
\nsaid in March it would spend 1.5 billion ringgit ($395 million)
\nto improve operations and attract those business travelers
\nwilling to pay higher fares for comfort.<\/p>\n
Singapore Airlines competes with Qantas Airways Ltd. on
\nflights between Asia and the U.S. West Coast, and with Emirates
\nbetween Asia and Europe.<\/p>\n
Singapore Airlines also competes for economy-class passengers
\nwith Valuair, Malaysia's AirAsia Bhd. and other low- fare
\ncarriers that are expanding their services in Southeast Asia,
\nVietnam, China and India.<\/p>\n
Singapore's $104 billion economy shrank in the first quarter
\nat an annual 5.8 percent pace, more than expected.<\/p>\n
As many as 2.03 million travelers visited Singapore in the
\nfirst three months, 8 percent more than last year, led by
\nvisitors from China, Indonesia and Australia, Singapore Tourism
\nBoard's data showed.<\/p>\n
The passenger growth was 2.7 percent, slower than Singapore
\nAirlines' 7 percent increase in seats, causing the airline to
\nfill 73 percent of seats in the quarter ended March, compared
\nwith last year's 76 percent.<\/p>\n
Singapore Airlines carried 3.89 million passengers in the
\nJanuary-March period, 1.7 percent more than a year earlier. It
\nflew 278.9 million kilograms of freight, up 6.7 percent,
\naccording to the airline's monthly statistics.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sia-may-post-q1-fall-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}