Jacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59 Posted (9 years 8 months 5 days 3 hours ago) and read 2014 times:
Looks like the mighty SQ is having some problems too...I don't see this oil problem abating anytime soon either.....but I think SQ has one of the better balance sheets of all the large air carriers (along with BA, EK, WN, and a few others) and will be able to withstand this..
"Wednesday July 27, 12:26 PM
Singapore Air profit could fall as fuel costs weigh
SINGAPORE, July 27 (Reuters) - Singapore Airlines is expected to report on Friday that quarterly profits slumped by a third, its second straight quarterly earnings drop, as the world's second most-valuable airline struggles with rising fuel costs.
The cost of jet fuel traded in Singapore has risen by more than 40 percent since the start of the year. With fuel accounting for a quarter of total group expenditures, Singapore Air now spends more on fuel than on salaries for its 13,500 staff.
But in an industry where many rivals fail to achieve steady profits, its operating margin of 11.3 percent compared with an industry average of 7.7 percent makes Singapore Airlines the world's fifth most profitable carrier, according to Reuters data.
Analysts say that part of this is due to its success in hedging its jet fuel requirements in the futures market.
"They main question is: How much have they improved their fuel hedging," said Glenford Tan, an analyst at Singapore brokerage GK Goh, who rates the stock a "hold".
Singapore Air Chief Executive Chew Choon Seng said in May he expected fuel costs to remain high for the foreseeable future and that it had hedged 32 percent of the 36 million barrels of jet fuel budgeted for 2005/06. It aims to hedge 30-60 percent of its fuel needs.
............Singapore Airlines has a market value of $8.8 billion, second in the industry only to U.S.-based Southwest Airlines Co. , which has a market capitalisation of $11.2 billion. ($1=1.661 Singapore Dollar)"
Pieinthesky From United Kingdom, joined Jul 2005, 392 posts, RR: 1
Reply 1, posted (9 years 8 months 5 days ago) and read 1974 times:
They're using the high fuel costs as a reason for another round of cutbacks. That was one of the reasons given for the closure of the Manchester and Glasgow tickets offices announced last week and I believe the Los Angeles office is losing some staff.