Singapore Airlines Profit Surges After Adding Tiger Air Earnings

Singapore Airlines Ltd., Asia’s third-largest carrier by market value, said third-quarter net income surged fourfold after adding a low-fare carrier’s earnings into its own account.

Net income rose to S$202.6 million ($151 million) in the three months ended December, from S$50.1 million a year earlier, the airline said in a statement to the Singapore stock exchange. Last year’s earnings were impacted by a S$80 million charge related to cargo operations.

Third-quarter profit also got a S$120 million boost from including the earnings of subsidiary Tiger Airways Holdings Ltd., the carrier said. That helped mask a S$216 million fuel-hedging loss after oil prices slumped to a four-year low last year.

“While the decline in oil prices is generally positive for the airline industry, hedging and competition will limit the effect on the group’s earnings,” the carrier said.

Singapore Air shares dropped 0.3 percent to close at S$12.13 before the earnings announcement. Ten of 22 analysts recommend investors buy the stock, according to data compiled by Bloomberg. Four say sell and eight suggest holding the stock.

Passenger yield, or money earned from carrying travelers one kilometer, rose to 11.5 Singapore cents from 11.2 cents a year earlier. Cargo yield dropped to 33.3 cents from 33.4 cents.

Singapore Air carried 4.75 million passengers in the quarter, 0.8 percent fewer than a year earlier.

Singapore Air will offer premium economy seats starting Aug. 9 with flights to Sydney from Singapore. The carrier will equip all its Airbus Group NV A380 superjumbos and 19 Boeing Co. 777-300ERs with the seats, as well as 20 A350s that will be delivered later.

The seats will also be offered on flights to Beijing, New Delhi, Hong Kong, Frankfurt, London, Mumbai, New York, Shanghai, Tokyo and Zurich later this year and early 2016.

Singapore Air is also enhancing cooperation between its two budget airline subsidiaries. Members of Singapore Air’s mileage program, KrisFlyer, will be able to redeem their points for vouchers to be used on flights on its low-fare carriers Scoot and Tiger Air starting in April.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE