Singapore Airlines’ (SIA) Cargo has reported an operating profit of SGD 148.1 million (USD 110.7 million) in the 2017/18 financial year, up from SGD 3.0 million in the prior year which was impacted by a SGD 132 million provision for competition-related matters.
Overall, Singapore Airlines generated a net profit of SGD 893 million for the financial year, a year-on-year increase of 148.1 per cent.
Cargo revenue in the 12 months to the end of March 2018 grew by SGD 264 million to around SGD 2.2 billion as cargo yield and volumes improved 8.9 and 5.3 per cent respectively, driven by what the carrier said was “strong air cargo demand”.
SIA Cargo carried 1.3 million tonnes of cargo and mail, 4.3 per cent more than the 2016-2017 financial year. Capacity went up by 2.0 per cent, with the load factor increasing by 2.1 percentage points to 65.3 per cent and yield growing by 8.9 per cent.
“Expenditure was up SGD 119 million, partly due to higher handling costs on increased freight carriage, staff costs, and aircraft maintenance and overhaul costs,” the carrier said.
The fourth quarter of the 2017/18 financial year saw SIA Cargo report an operating profit of SGD 28 million, a SGD 33 million year-on-year improvement from a SGD 5 million loss.
Revenues in the fourth quarter were up SGD 55 million as cargo volumes grew 4.6 per cent and cargo yield improved 8.5 per cent, while “expenditure increased by SGD 22 million, due in part to higher depreciation.”
Currently, SIA Cargo’s freighter network of seven B747-400Fs covers 19 cities in 13 countries and territories. Although the main deck fleet will remain unchanged for 2018/19, the carrier expects cargo capacity to grow by 6.0 per cent.
SIA Cargo, which was re-integrated into the parent company from April this year, said it will, “continue to pursue charter opportunities and deploy capacity to match demand”.
It added: “The overall demand outlook for cargo remains moderately positive, but is subject to geopolitical uncertainties which may have implications on global trade.”
Meanwhile, Singapore Airlines (SIA) has unveiled plans to merge its regional full-service subsidiary SilkAir into the parent airline in the next decade.
The announcement follows a major USD100 million cabin product upgrade project that will involve retrofitting SilkAir’s entire fleet with lie-flat business class seats. Seatback inflight entertainment systems will also be installed as SIA upgrades SilkAir’s current product to SIA’s higher standards.
The enhancements come as the regional carrier replaces its regional widebody fleet of A330-300s and older B777 variants with new B787-10s and A350-900s.
Meanwhile, the absorption of SilkAir into SIA should enable the group to reduce costs and improve efficiency as the number of operator’s certificates, which just a year ago stood at five, is reduced to only two. The SIA Group has already merged the short haul low-cost carrier, Tigerair with the long haul, low-cost carrier Scoot, as well as reintegrated SIA Cargo back into the main airline.