Singapore Airlines net profit up 12.8% in 2012-13

Singapore Airlines (SIA), one of the largest and best airlines in the world, registered a net profit of 379 million Singapore dollars (303.2 million U.S. dollars) in Financial Year (FY) 2012-13, up 12.8 percent on year. However, its operating profit registered at about 229 million Singapore dollars (183.2 million U.S. dollars), a loss of 19.8 percent on year. The SIA said its net profit rise was mainly due to "an increase in non-operating items from surplus on the sale of aircraft, spares and spare engines, and higher net interest income. " The carrier said its operating performance was mainly affected by high fuel prices and yield pressures. "Promotional activities necessitated by intense competition as well as depreciation of revenue-generating currencies against the Singapore dollar drove passenger yields lower by 4.2 percent. Cargo revenue continued to suffer from a contraction in both loads (-6.0 percent) and yields (-4.3 percent)," the SIA said in a statement. In expenditure aspect, the fuel accounted for about 40 percent of the total group expenditure of 1.4869 billion Singapore dollars (1.1895 billion U.S. dollars), the SIA said. Despite the challenging environment, the carrier said its full- year group revenue was up 1.6 percent on year to about 1.5098 billion Singapore dollars (1.2078 billion U.S. dollars), as a result of a 7.3 percent passenger carriage growth, albeit at lower yields. The SIA has announced early this year that it would release 76 pilots who were employed on fixed-term contracts by the end of June, when their contracts will have not expired, aiming at reducing excess labour force amid business slowdown. Looking forward, the SIA said that passenger bookings for the next few months are almost flat compared to the same period last year. "Yields are likely to remain under pressure amid weak economic sentiment, and revenues will be further diluted if key revenue-generating currencies continue to depreciate against the Singapore dollar," it said in a statement. While the fuel prices seem to be high in near term, the company 's cargo business also faces an additional issue of overcapacity in the market, which will add pressure to loads and yields, the SIA added.