Singapore Airlines reports net loss in fourth quarter

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The majority of SIA Cargo's almost 900 employees will be retained in the new Cargo division; some will be transferred to other SIA divisions, said SIA.

"Intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields, " the airline said, adding that fuel prices had also risen $US37.90 per barrel in January, 2016, to $US61.90 in March, 2017.

The move is not expected to have a material impact on SIA's financial performance in the 2017/18 financial year.

According to the group, the airfreight market has since seen structural change - and SIA Cargo's freighter fleet has been "right-sized" in recent years to the current seven aircraft, while the proportion of revenue from passenger aircraft "bellyhold" capacity has increased significantly.

Its annual net profit more than halved from year-ago levels to S$360 million.

SilkAir, now operating 30 Airbus and Boeing single-aisle aircraft, will get its first four 737 MAX 8 aircraft in 2017-18, while Budget Aviation Holdings will add four 787s. Buffeted by deteriorating yields, cost pressures as well as keen competition in both the full-service and budget sectors, the group has embarked on a wide-ranging review of its business to position itself better for long-term growth. It also expected its decision to operate Scoot and Tiger under the Scoot brand to deliver advantages. Pre-tax, the result was a SGD$518.6 million net profit, down from SGD$972.4 million in 2016.

To position the group for growth in the budget and regional markets, SIA took a stake in budget carrier Tigerair, which was set up in 2003, and now owns the entire airline.

To that end, SIA said it had established a wide-ranging review of the airline group's network, fleet, product and service, as well as organisational structure and processes as part of efforts to build on the strategic initiatives now being implemented and achieve long-term sustainable growth.

Singapore Airlines (SIA) reported a 55 percent drop in full year net profit as a soft fourth quarter hit the overall result.

Total revenue fell $S592m, mainly due to a $S51m reduction in passenger flown revenue. Earlier this year, the carrier ordered 39 long-range aircraft from Boeing Co in a deal worth US$13.8 billion (S$19.2 billion). SIA said this was affected by a 3.8 per cent contraction in passenger yield and a 1.4 per cent decline in passenger traffic.

Load factors eased 0.6 of a percentage point to 79 per cent, while yields slipped 3.8 per cent and cost per available seat kilometre excluding fuel rose 3.6 per cent.

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