Wirraway From Australia, joined Mar 2001, 1321 posts, RR: 1 Posted (12 years 2 months 3 weeks 2 days 2 hours ago) and read 1890 times:
Singapore Airlines Warns Of Crisis; To Cut Costs
By Shen Hong
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Echoing the dire straits plaguing other major global airlines, Singapore Airlines (Singapore: SIAL.SI - news) Ltd. (P.SAL) Thursday warned that it's entering the most difficult period in its history.
Painting a gloomy picture for its near-term outlook, SIA said it's reviewing its operations and will implement a series of painful cost-saving measures. Although not surprised by the news, analysts say the already-battered stock may not be able to avoid further selloffs Friday.
In one of the airline's most strongly worded statements, SIA's Deputy Chairman and Chief Executive Cheong Choong Kong told the airline's staff that the current woes are just the beginning and that they must prepare for the worst.
"This is an important message and an unhappy one," Cheong said. "The pain is only just starting; nobody dares predict when or how it will end."
While high fuel costs and poor economic conditions have made life tough for SIA in the past 12 months, "the immediate future confronting commercial aviation is far more serious," Cheong said.
Air traffic, particularly to the U.S., has declined in the wake of the terrorist attacks in New York and Washington, adding that costs are rising, particularly those of fuel and insurance.
The situation will worsen if the U.S. launches military strikes which could trigger terrorist reprisals, he said.
In order to cope with the difficulties, SIA will adjust capacity to match demand and will trim budgeted growth, "even if it means lower aircraft utilization," Cheong said.
In addition, all planned expenditure, except the essential, will be deferred, slowed down or canceled, "including capital expenditures on projects dear to us," he said.
Staff recruitment will cease, except in one or two areas, he said.
"Many airlines are starting to retrench large numbers of staff. We ourselves may not be able to avoid retrenchments, but we will look at other cost-reducing measures first," he said.
While employees and unions may be called upon to make sacrifices, Cheong said that when needed, SIA's senior management will take the lead. - - 20/09/01 11-41G
'Longreach' From Australia, joined Jul 2001, 505 posts, RR: 1 Reply 2, posted (12 years 2 months 3 weeks 2 days 2 hours ago) and read 1651 times:
If they are still the most profitable airlines on the planet why are they saying they will reduce costs? They must already have one of the lowest cost network due to their huge profit and under 100 a/c fleet.
I think this is an excuse to cut staff numbers or get them to reduce their salaries even further.
PerthGloryFan From Australia, joined Oct 2000, 751 posts, RR: 0 Reply 3, posted (12 years 2 months 3 weeks 2 days 2 hours ago) and read 1637 times:
Methinks the kiwi of the south pacific is also rapidly becoming an albatross necktie SIA is looking to rid it self of ... but I don't see a rush of takers.
It looks like Helen the Red may need to re-nationalise AirNZ/TEAL/NAC if it is to last beyond a week.
Also.... In addition, all planned expenditure, except the essential, will be deferred, slowed down or canceled, "including capital expenditures on projects dear to us," he said.
.... so no blue, white & gold A380s for a long while it would seem.
Just a month ago a main issue facing civil aviation globally was airspace management, especially in N. American & Europe, some how I don't see these systems being under significant traffic pressure for some time now.
If an airline like SQ is pulling back, things are becoming very bleak indeed for our aviation world.
Meanwhile, anyone want to buy an airport (well the long term operating lease actually, not the land itself), the busiest one RPTwise in the SW Pacific - with crazy inefficient terminal layout, crazier still noise abatement rules, going cheap, all enquiries to the Australian govt, all offers considered, timeline extended by one week due to underwhelming interest.
Anzett From , joined Dec 1969, posts, RR: Reply 4, posted (12 years 2 months 3 weeks 2 days 2 hours ago) and read 1605 times:
It is a pitty that SQ is recognising this after 10 days from the event. This is due to the fact that they have heavy investment in Virgin Atlantic and Air NZ (failed venture) which will under cut its balance sheet this year. Dr CK Cheong has plenty to answer for at the next AGM.
I bet Singapore_Air is crying as he reads this message on this forum about SQ's "most difficult" period in its history. Please do not wee your pants Singapore_Air. I suggest you change your interest from Singapore Airlines to GIRLS...you will find this more interesting! I did when I grew up! You will love it and probably forget about SQ. Grow up smarty pants and concentrate on your school work. Leave the aviation problems to us (the consultants) to work on...please concentrate in getting high marks or otherwise you might end up cleaning toilets in Singapore Airlines aircrafts...that will not be good would it.
Docpepz From Singapore, joined May 2001, 1954 posts, RR: 3 Reply 9, posted (12 years 2 months 3 weeks 2 days ago) and read 1503 times:
SIA should write off their investment in Air NZ. At least it won't be reflected in this year's accounts, but in 1999's(if that's the yr they bought it) TO pump in an extra $100 million into a small South Pacific Airline is HARDLY a strategic investment.
Their losses from Air NZ ammounts to $275 million (Sing Dollars)
Their present woes have little to do with the terrorist attacks. SIN-USA accounts for only 10% of their revenue. Europe-SIN-Australia accounts for 40%. That's where they're getting screwed. They've just lost a huge customer base in Australia. They only had a 25% stake in Air NZ and didn't have management control. Not that the Aussies are gonna care. According to Singapore newspapers, SIA's reputation in Australia is not all that wonderful now. Could the Australians out there please verify this?
Anyway, as an AIRLINE, Singapore Airlines is an excellent airline. As an Investment company, hmmm.......... That's the general feeling here in Singapore anyway. Like, how did they screw themselves up so badly down under? When they thought they were in charge of everything............
Anyway guys, to SIA, a profit below Sing$1 billion is a calamity. They will probably make a profit of $100+million for this financial year, which is disastrous as far as they are concerned. They have HEAPS of reserves. However, if they keep throwing their cash at worthless investments, it'll be a completely different picture a few years down the road. THeir 2 major investments ended up bad. Air NZ was a catastrophic failure. Virgin Atlantic's gonna announce a loss. It's good they didn't get Air India!
TO end, I'd like to alert you guys to the following letter that appeared in the Forum page of The Straits Times on Tuesday:
After Ansett debacle, what next, SIA?
I REFER to the reports on Ansett's financial troubles (ST, Sept 15), and consider that Singapore Airlines (SIA) was very fortunate to have been saved by the New Zealand government from a hefty loss, by not being allowed to carry on with its proposal to boost its stake in Air New Zealand (Air NZ) from 25 per cent to 49 per cent, at more than three times the current price of its shares.
Air NZ shares have since traded at below NZ$0.30 (S$0.22). On top of this, SIA also has to bear its share of the huge write-off on Air NZ's wholly owned subsidiary, Ansett Airlines, which has had to be placed in voluntary administration.
SIA now has another major decision to make.
Should it now spend NZ$150 million to raise its 25-per-cent stake to 34 per cent at the current depressed price, and perhaps incur more losses if Air NZ does not pull through the current crisis?
At the SIA annual general meeting on July 14, I asked why SIA was so keen on doubling its stake in Air NZ and its Ansett Airlines subsidiary when both were desperately in need of a very substantial injection of funds.
Less than two months after the AGM, Ansett, which was part of SIA's long-term plans, had to cease operations after the appointment of an administrator.
I would like to ask SIA if it still believes the current crisis could have been avoided, had the New Zealand government given its approval earlier for SIA to raise its 25-per-cent Air NZ stake to 49 per cent.
And with Standard & Poor's downgrading Air NZ's credit rating by two notches to B-minus, its future seems even dimmer. Unfortunately, SIA shareholders have to hold back their queries for 10 months until the next AGM.
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 10, posted (12 years 2 months 3 weeks 1 day 23 hours ago) and read 1456 times:
Well some people have to go to school. However it seems that some people on this thread didn't have an education when they were young. What a shame. I pity you.
Let's not start with the facts first, let's start with the immaturity.
Wirraway: Unfortunately, that is not my response. Sorry but I'm going to spoil your fantasy.
Anzett: LOL! Why don't you make up your mind and tell us if you are a consultant, or an AN employee in Sydney! And no, i won't leave it you biased "consultants" like you. Unfortuantely, your attempts to be rid of me and spread SIA-hate across the forums will be stopped.
Cathay Pacific: If Singapore Airlines isn't faring well as some may suggest, how about the airline that you support eh?
Anzett: You were JohnWest. therefore, are you sure that you are a woman?
CX_flyboy: Unfortunately for you, I have no committed suicide. It's unfortunate that you hate me so much that you would like me to be rid of this planet.
Ok. I have read the article. There are updates on Yahoo Finance that haven't been uploaded yet.
I can say this. SIA will whether the storm. SIA reported on Tuesday that it's bookings have not sufferred. Just yesterday, CX and All Nippon Airways (A Star Alliance Member), indicated the same, following SIA.
SO it seems that the Asian airlines are doing much better in this crisis than their European counterparts.
There is no doubt that this is a crisis in the airline industry. SIA is not immune to that. You only have to look at the decline in profits during the Asian Economic Crisis in the 90s to see that. So don't get up on yer high horse yet people.
SIA is cutting costs. Of course, I wouldn't have expected any different. Staff will have to go and I hope that the directors will cancel their raise that they earned last FY.
In 1998, all Singapore Airlines employees refused a pay rise (which is annual). This was praised worldwide by analysts. The airline, though pays relatively little by international standards to its staff, has shown and will again, that it can stand up in unity and go through the windshear (it's not a storm anymore I've decided).
I have decided. I'm going to consult the SIA annual report for some figures. Please hold.
SailorOrion From Germany, joined Feb 2001, 2058 posts, RR: 6 Reply 11, posted (12 years 2 months 3 weeks 1 day 23 hours ago) and read 1435 times:
Good counter-attack Singapore_Air!
I am trying to be objective (although this is always hard), and to be honest, SQ is a nice airline, but not my favourite one, for one reason or another. However, I also think the SQ is definetly one of the best-run businesses in aviation on this planet right now, maybe even the best (along with Southwest). Whenever you like something or not, numbers dont lie.
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 12, posted (12 years 2 months 3 weeks 1 day 23 hours ago) and read 1424 times:
The Americas contributed to 24% of SIA's revenue last year. Now for arguments sake (i know this is not business like), I take 24% off SIA's record profit last year, they will make S$1 177 240 000. Now, if I decrease each region by 20%...(that's what the US airlines are cutting by I take it)... then...
OK I have decreased each region by 20% and Americas by 100%
Therefore, 941 792 000 is the net. Fuel is cheaper now than before, so I won't up the profit just for that.
Now then, minus ANZ which is 300 million (for arguments sake), SIA will have 641 792 000 SGD Profit for this coming Financial Year.
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 13, posted (12 years 2 months 3 weeks 1 day 23 hours ago) and read 1391 times:
Let us now also assume that VS will make a loss of £100 million, which means SIA will have 241 792 000 SGD of Net profit after tax.
Now off to Singaporeair.com to convert currency!
Impact Of Global Situation On Singapore Airlines
20 September 2001
Like other international commercial airlines, Singapore Airlines (SIA), expects to enter a difficult trading period as a result of last week's events in the United States, which follow a slowdown in the economy in the past 12 months.
Following last week's terrorist attacks, SIA's traffic has declined on services to the United States. Forward bookings on the transatlantic services to New York and Chicago in the coming weeks have declined about 10 per cent compared with pre-attack levels. However, bookings on US services across the Pacific to Los Angeles, San Francisco and Vancouver, are generally holding, as of now. We are continuing to closely monitor the forward bookings and uplift levels.
The slowdown in the economy has already affected traffic flows and freight traffic systemwide. The terrorist attacks have had an additional impact, with people now appearing to be less inclined to travel for business or pleasure. Costs continue to rise, particularly those of fuel and insurance.
From 1 October, SIA, like other airlines, will face increased insurance cost. As a result of the attacks in the United States, a war surcharge will be levied in respect of passenger liability cover, equivalent to USD1.25 per passenger, on all flights. This surcharge will be passed on to the customer.
In light of the prevailing situation, SIA has reviewed its operating patterns. In the near future, some frequency adjustments will be made to the following services:
* Singapore - Amsterdam - New York (Newark) - currently four per week;
* Singapore - Hong Kong - currently seven per day;
* Singapore - Kaohsiung - currently five per week;
* Singapore - Kuala Lumpur - currently ten per day;
* Singapore - Surabaya - currently 12 per week.
In the coming weeks and months, if the situation deteriorates, capacity systemwide will be reviewed to match demand. Budgeted growth will also be trimmed, even if that means lower aircraft utilization.
Non-essential expenditure will be deferred, slowed down or cancelled. Retrenchment cannot be ruled out, but other cost-reducing measures will be pursued first, before retrenchments are considered. Staff recruitment, other than in one or two essential areas, will be frozen until the situation improves.
The reality is that if military action takes place with subsequent terrorist reprisals, passenger traffic and cargo loads can be expected to decline further. There is also the possibility of the closure of vital air spaces in such circumstances. If these events materialise, further cuts in services would be needed and costs will rise. SIA has made contingency plans to use alternate flight paths if the normal flight paths are closed to air traffic, to ensure passenger safety is not compromised.
GuyBetsy1 From Canada, joined Aug 2001, 836 posts, RR: 6 Reply 14, posted (12 years 2 months 3 weeks 1 day 21 hours ago) and read 1384 times:
Just because the government made the announcement... and then just because all other airlines (mainly US airlines) are saying it will be so for them,... and just because there seem to be a trend going on.
That's the way the Singapore society works. And that's the way how Singapore Airlines works too. Just because 'other people' are suffering, they 'have to suffer' to... and of course, it's a perfect excuse to cut pay rises!
Trust me, SQ will still post a bigger profit than most other airlines.
The low down is that most people will avoid taking American carriers. And the European carriers carry more Transatlantic traffic than SQ does, so if the slowdown in American travel will affect the public, the European carriers (being allies of the US during this crisis) will feel it too. I think most people will avoid most of the above carrier and fly with the asian ones. I'd say travelling on the likes of say, KU, GF, EK, TG,CX, MH, SQ would be more common!
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 15, posted (12 years 2 months 3 weeks 1 day 21 hours ago) and read 1363 times:
GuyBetsy1: Your optimism is appreciated but not shared. I am preparing for the worse, and trust me, this is the worst of times!
That is the net profit that I expect SIA to post. Although I have exaggerated that they will not make a single cent on the US routes. In addition, I have not calculated the ex-gratia 6.04 month bonus payment to employees.
Fanofjets From United States of America, joined Apr 2000, 1909 posts, RR: 3 Reply 16, posted (12 years 2 months 3 weeks 1 day 19 hours ago) and read 1322 times:
I am glad this thread became more civilized as I read on; I was about to pop the old "Which is better, Airbus or Boeing?" question in the hope of more sensible replies (which isn't saying much). I am glad to see the last several posts stick to the facts and informed opinion.
I believe that the world is in for economically difficult times. I also believe that the worst has yet to come. However, I am also confident that things will get better in the long run. Then we can get back to our A vs. B wars.
The aeroplane has unveiled for us the true face of the earth. -Antoine de Saint-Exupery
Cx flyboy From Hong Kong, joined Dec 1999, 6448 posts, RR: 56 Reply 21, posted (12 years 2 months 3 weeks 1 day 13 hours ago) and read 1271 times:
I never said that I hated you. It was a joke. Lighten up would you. You seem to be a very aggressive 13-15 yr old, and I am not sure if you are aiming for a flying job at SQ or not, but you do know they test your personality for agressiveness and things don't you?