- Net profit falls 81 pct to S$56 mln
- Average ticket prices decline 2.2 pct as oil price rises
- Expects headwinds from cost pressures, competition
(Adds details of results, outlook)
Singapore Airlines Ltd SIAL.SI on Tuesday reported an 81 percent plunge in second-quarter earnings, hurt by higher fuel prices, lower airfares and non-cash losses at its part-owned Virgin Australia Holdings Ltd (VAH) .
The airline said bookings in the coming months were expected to be stronger year-on-year.
"However, headwinds continue to persist in the form of cost pressures arising from significantly elevated fuel prices compared to a year ago, as well as keen competition in key operating markets," Singapore Airlines said in a statement.
The carrier, a benchmark for Asia's premium airline industry, posted a net profit of S$56 million ($40.5 million) for the quarter ended Sept. 30, down from S$293 million a year earlier. The prior-year figure was restated due to accounting changes.
Excluding the S$116 million loss relating to its 20 percent stake in Virgin Australia, the company reported an adjusted net profit of S$172 million, down 41 percent from a year earlier.
Group revenue rose 5.4 percent to S$4.06 billion during the quarter as the airline added capacity and filled a higher proportion of seats.
However, yields, a proxy for ticket prices, fell 2.2 percent in the second quarter compared with a year earlier, failing to help offset the impact of a 24 percent rise in fuel prices.
That yield decline was less steep than a first-quarter decrease of 3.2 percent but bucks a broader global industry trend toward rising fares, including at regional rivals like Hong Kong's Cathay Pacific Airways Ltd 0293.HK and Australia's Qantas Airways Ltd (QAN) .
Singapore Airlines is in the second year of a three-year transformation plan designed to cut costs and boost revenue. It plans to merge regional arm SilkAir into its main brand after 2020.
Its low-cost carrier Scoot, which raised fares by around 5 percent from Sept. 1 in reaction to higher oil prices, swung to an S$11 million operating loss during the second quarter from a S$2 million profit a year earlier as fuel and expansion costs outpaced revenue growth.
Singapore Airlines' management team will hold a detailed briefing for investors and media on Wednesday.
The airline's shares, which fell 1.8 percent on Tuesday, have fallen by 11.7 percent since January. ($1 = 1.3833 Singapore dollars)
