SIA shares fall 6% as profit nearly halves amid intensifying competition

SINGAPORE — Shares of Singapore Airlines dropped after the city-state’s flag carrier reported a fall of just about 50% in net profit for its first half April to September period, citing lower yields and growing competition.

As markets opened on Monday, the stock fell as much as 6.2%, before later recovering to trade lower by 3.57%.

Net profit in the primary half of the fiscal yr got here in at 742 million Singapore dollars ($559.12 million), 48.5% lower than the SG$1.44 billion in the identical period a yr ago.

Operating profit for the corporate fell 48.8% to SG$796 million, down from SG$1.55 billion a yr ago, while revenue increased 3.7% to SG$9.5 billion.

Despite the reduction in profit, the airline maintained an interim dividend of 10 Singapore cents a share.

Singapore Airlines said in a release that the autumn in operating profit was as a consequence of “increased capability and stronger competition in key markets,” which led to a fall in yields and ultimately, profit.

Speaking at an earnings briefing, SIA Chief Industrial Officer Lee Lik Hsin said that the corporate is seeing tougher competition globally, adding that other airlines are recovering to their pre-Covid capability.

SIA CEO Goh Choon Phong also said that restoring capability has also put more pressure on yields in comparison with the yr before.

Passenger traffic grew 7.9% yr on yr, but this was lower than its passenger capability expansion of 11%, Lee said. This implies, passenger load factor — which measures how much capability is used — dropped 2.4 percentage points year-on-year to 86.4%.

Nevertheless, SIA won’t “hold back on capability growth simply because there’s competition out there,” Lee added.

Last Monday, SIA announced a SG$1.1 billion cabin retrofit program for its 41 long range and ultra long range Airbus A350 jets.

The airline said the primary retrofitted long range jet will come into service by 2026, and this system will probably be complete by 2030.