SIA Cargo Q3 profits down despite demand jump
05 / 02 / 2016
Singapore Airlines Cargo saw operating profits decline in its fiscal third quarter despite an increase in demand.
SIA Cargo recorded an operating profit of S$2m during the October-December period compared with a S$17m profit during the same period in 2014.
It said the decline was down to yields declining by 13.5% as a result of industry wide overcapacity and 2014 figures being boosted by disruption at US west coast ports and Manila driving up prices.
The lower yields more than offset a $21m decline in operating costs largely down to lower fuel prices.
The decline also came despite a 7.9% year-on-year increase in demand to 1.8bn tonne km. However, an increase in its passenger and cargo fleet resulted in capacity jumping by 8.2% and as result its load factor slipped to 64.9% from 65.1% in 2014.
With the return of one freighter from its lessee upon expiry of the lease term in October 2015, the operating fleet of SIA Cargo has increased from eight to nine 747-400 freighters at the end of December 2015.
The operating fleet of the parent airline comprised 104 passenger aircraft (55 777s, 30 A330-300s and 19 A380-800s), with an average age of 7 years and 4 months as at 31 December 2015.
Looking ahead, the airline remained cautious “amid the prevailing industry overcapacity and tepid demand growth”.
“SIA Cargo will continue to manage capacity to better match demand, and pursue higher-yielding product segments,” it said.
The company added that it planned for ad-hoc cargo services to the Americas, Europe, South West Pacific and North Asia in March 2016 to cater to seasonally higher demand.
The outlook for air cargo is cautious amid the prevailing industry overcapacity and tepid demand growth. SIA Cargo will continue to manage capacity to better match demand, and pursue higher-yielding product segments.
For the calendar year, SIA was one of the few airlines to improve performance compared with a year earlier.