Singapore Airlines Ltd.’s net income slumped to its lowest in three and a half years in the second quarter as challenges at Air India Ltd. continued to hurt its bottom line.
Net income fell 82% from a year earlier to S$52 million ($40 million) in the three months ended Sept. 30, while revenue rose 2.2% to S$4.9 billion, the carrier said Thursday. Quarterly operating profit rose about 23% to S$398 million.
Air India, in which SIA Group has a 25.1% stake, continued to weigh on its financials. Singapore Air said its share of results of associated companies was S$417 million lower year-on-year in the first half, reflecting the Indian carrier’s losses.
Air India is still reeling from a fatal crash earlier this year and is seeking at least 100 billion rupees ($1.1 billion) in financial support from its owners Tata Sons Pvt. and Singapore Air, Bloomberg News reported last month. SIA said it is committed to working with Tata Sons to support Air India’s turnaround plan.
At a group level, passenger yields — a gauge of flight profitability — fell 3% to 9.8 Singaporean cents per kilometer. The yield decline continued to moderate, signaling an improving competitive outlook in the wake of the shutdown of smaller rival Jetstar Asia during the fiscal period.
SIA also benefitted from expenses staying broadly flat, while fuel costs declined in the quarter.
Despite the airline’s third consecutive quarterly decline in net profit and challenges from geopolitical tensions, economic headwinds and supply chain constraints, it struck an optimistic tone for its outlook. Demand for air travel remains resilient heading into the third quarter, the carrier said.
SIA Group flew a record 10.5 million passengers the quarter. Both flagship brand SIA and discount unit Scoot saw fuller flights as it increased capacity on strong demand.
Scoot continued to shine with load factors through September exceeding 90% for six consecutive months. It is likely benefiting from the end of Jetstar Asia services in July as it, as well as SIA, filled the gap left behind.
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