Airline News
SIA releases 7 A350s, Q1 profit triples
August 3rd 2015
Singapore Airlines (SIA) has agreed to a request from Airbus to release seven of its A350-900 orders “in a series of adjustments to orders and deliveries to meet the immediate needs of the airline and the plane maker,” it said in a statement last week. This reduces SIA’s A350 order book to 63. Read More » The Singapore carrier stressed, however, that its purchase options for another 20 -900s remain unchanged, and, if need be, it could also bring forward the deliveries of some of the other A350s on order, as well as extend the leases on some A330s, to meet its fleet renewal and growth plans.
In July, SIA’s chief, Goh Choon Phong, said SIA would like to resume direct flights to the U.S. and as such, he was “encouraging” the manufacturers to address long-range. According to Leeham News, SIA has turned its attention to a long-range variant of the A350-900 which, if developed, would likely feature a maximum take-off weight 12 tons heavier than the standard version (268 vs 280 tons) thereby extending its range albeit with as much as 22% improved fuel burn compared to the B777LR, Leeham said. Boeing’s answer to the A350, the B777-X series, is still seven years from entering service. In the interim, Goh told Airline Business SIA’s experience with the A380 was “generally good, but could be better” and so he would like Airbus to “squeeze more fuel efficiency from the Rolls-Royce Trent 900s” of its five incoming A380s from 2017, “perhaps in the range of 1-3%”.
Meanwhile, for the first quarter of 2015, the SIA Group has reported a net profit of SG$$91.2 million ($66.6 million) for the three months ended June 30, up from SG$34.8 million a year earlier. Revenues were up slightly at SG$3.73 billion versus SG$3.68 billion. Operating profit at mainline SIA increased 140% to SG$108 million, although, according analysts at CIMB, this included SG$110 million in compensation from Airbus for agreeing to give up the seven A350 production slots, without which "SIA would have suffered a core net loss of SG$25 million,” they were quoted as saying in the Singapore Business Review. Regional subsidiary SilkAir boosted its operating profit from SG$2 to SG$5 million year-on-year, while LCCs Tigerair and Scoot produced losses of SG$1.7 million and SG$20 million, respectively. SIA Cargo recorded a net loss of SG$9 million as “cargo yields are unlikely to see an upturn as industry overcapacity persists," it said. SIA Engineering's operating profit was flat at SG$21 million. Looking ahead, SIA said yields across all its divisions remain under pressure in the July-September quarter due to a competitive environment and overcapacity.
