Singapore_Air From United Kingdom, joined Nov 2000, 13735 posts, RR: 19 Posted (9 years 11 months 1 week 2 days 5 hours ago) and read 3725 times:
Much to the joy of all Airliners.net users – Singapore Airlines Limited – A Member of Star Alliance – has posted an astonishing profit for the Financial Year ended 31 March 2004. I wonder how much kudos will be posted in reply.
According to Bloomberg, a poll of seven analysts speculates that full year profit will come in at S$702M / US$406.809M indicating that they think that Q4 profits have quadrupled over the quarter the year before.
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The Airline has benefited from improving traffic and yields and careful cost cutting exercises and efficiencies. Furthermore, this means that all SIA Group staff will receive their pay cuts back in full with an additional 15%. It is unclear whether there will also be a profit-sharing bonus provision for this FY. Singapore Airlines Limited staff are currently negotiating a new Collective Agreement. SIA Engineering Company – 87% owned by Singapore Airlines Limited – has just completed a new Collective Agreement with unions.
During the Financial Year – the Airline has had to suffer the consequences of the after effects of the War on Iraq, the Severe Acute Respiratory Syndrome crises and more recently, higher oil prices. However, despite a minute first half loss of S$7 million / US$4 056 500 – SIA Group has posted a profit of more than S$600 million.
For the future, the Group has set a target of 9% return on shareholders funds amounting to a S$1.6 billion / US$927 482 465 to allow for sustainable growth in the future. This target makes today’s announcement of profits unacceptable. However, there seems to be little scope for the 10% – 20% cut in costs that CEO Mr. Chew Choon Seng has set to be slashed. Staff costs are already very low and the other biggest cost component fuel is basically an externally price-determined factor – for which hedging does not provide full protection. The Airline and its subsidiaries are actively engaging in selling and leasing back aircraft as a measure to defend itself against depreciation accounting costs. Furthermore, as budget airlines sprout up, I personally feel that though the threat from such airlines is often overstated, the crushing of these airlines is extremely important. Competition from dubiously-financed airlines is also on the table and the Airline will need to contend with that arguably more disturbing issue very soon.
So a tough financial year has ended. After the War and SARS and a first half loss, SIA has had one of its most testing periods of late. Followed by the airing of dirty laundry and the results of a survey carried out by the Singapore Government being made public allowing for all to see a damning ten point evaluation of the working culture within SIA, the intervention of the dear Senior Minister Lee Kuan Yew who has avoided playing ‘ducks and drakes’ with unions and management, the SM learning that LAX stands for Los Angeles and not London Heathrow, the conversion of 9V-SPG into a hospital with drip, nurses and a doctor, the setting up of Tiger Airways, the launching of the A345Leadership, the disposal of the 3TENs and the CELESTARs and more recently the sudden departure of three members of the Public Affairs department and the Senior Vice President for Cabin Services – it’s been one hell of a year.
Kudos for getting through it. However change will need to speed up to ensure a viable, profitable and prosperous new year for the SIA Group.
Singapore Airlines – A Great Way To Fly
http://asia.news.yahoo.com/040514/5/singapore84747.html>Business Times (Singapore) ChannelNewsAsia via Yahoo Singapore
Not all of the contents contained in this post come from the four above hyperlinked sources. The author of this post is not employed nor associated with Singapore Airlines Limited or any of its associated, linked or subsidiary companies.
Aussie747 From Australia, joined Aug 2003, 1162 posts, RR: 0
Reply 1, posted (9 years 11 months 1 week 2 days 1 hour ago) and read 3580 times:
Well it does not surprise me.
* Their wage costs must be a fare bit lower than most other profitable carriers in the world right now.
* Some of their European Routes even though March / April were operating on yields of close to 100% esp AB) (FRA / FRF / EDDF), Germany">FRA.