Singapore Airlines profit below estimates, flags weak outlook

 

Singapore Airlines Ltd , which is expanding in the low-cost segment, reported a weaker-than-expected rise of nearly 13 % in full-year net income and said it was cutting capacity between April and June in a sluggish market.

 

Asia's second-biggest airline, which has a market value of $11 billion, said net income rose to S$379 million for the year to March 31. This was below an average forecast of $409.6 million, according to Thomson Reuters StarMine SmartEstimates.

 

Fourth-quarter profit of S$68.3 million was also below estimates.

 

SIA said the parent airline company and its regional carrier SilkAir were implementing capacity adjustments to weaker markets between April and June.

 

"Forward passenger bookings for the next few months are almost flat compared to the same period last year," SIA said in the statement on Thursday.

 

"Yields are likely to remain under pressure amid weak economic sentiment, and revenues will be further diluted if key revenue-generating currencies continue to depreciate against the Singapore dollar."

 

SIA's premium class travel, which makes up about 40% of revenue, has been hit by cutbacks in corporate budgets. Profit had slumped nearly 70% in its previous financial year and margins had narrowed.