SIA Cargo cuts year end operating loss to S$100m

SINGAPORE AIRLINES CARGO recorded a S$100m operating loss for the 2013-14 financial year, as efforts to better match capacity with demand saw a reduction from the S$167m loss in prior year.
The SIA Group reported an impairment of S$293m on four surplus freighters that have been removed from the operating fleet and marked for sale in the financial year ended March.
Other cargo items included in group-wide financial one-offs related to provisions for settlements between SIA Cargo and plaintiffs in the US air cargo class action (S$78m) and plaintiffs in the Australian air cargo class action (S$6m).
All these were partly offset by a group-wide gain of S$372m upon completion of the sale of Virgin Atlantic to Delta Air Lines.
SIA Cargo’s load factor of 62.5 per cent was 0.9 percentage points lower, as a 5.1 per cent reduction in load tonne-km outpaced a 3.6 per cent cut in cargo capacity.
This month will see SIA Cargo return one B747-400F on expiry of its lease, meaning that the cargo arm will operate eight freighters in the current financial year.
In its outlook, the group said that cargo yield is “expected to remain weak as the air cargo industry continues to face challenges from overcapacity”.
The group is expected to issue a statement this week on the successor to Lee Lik Hsin, who announced on Wednesday that he is stepping down as president of SIA Cargo after nine months in the role.
Lee is to be the new group chief executive of Singapore-based budget passenger airline Tiger Airways, in which the SIA group has a 40 per cent stake.