Singapore Airlines Ltd. (C6L.SG) said Thursday its fiscal first quarter net profit fell 8.6% on year, mainly because a one-time gain had boosted income last year.
Net profit in the June quarter was 235.1 million Singapore dollars (US$173.2 million), compared with S$256.6 million in the same period last year. Revenue rose 5.6% on year to S$3.86 billion, Singapore Airlines said in a statement to Singapore Exchange.
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Fuel costs rose 3.4% on-year to S$925.7 million, mainly due to higher average price of oil this year. The company's fuel hedging loss, however was lower in the quarter. For the second quarter, Singapore Airlines said it has hedged 42% of its fuel requirement at an average price of US$63 per barrel based on a local benchmark.
"Fuel prices are expected to remain volatile in the months ahead," Singapore Airlines said, adding it has hedged nearly half of its fuel requirement over the next five years.
The Singapore carrier's passenger yield, or revenue per passenger per kilometer flown, slipped further to 10.1 Singapore cents a kilometer, compared with 10.3 Singapore cents a kilometer in the first quarter of 2016. Passenger yields, a commonly used measure for an airline's ability to generate revenue, have declined in six of the last seven financial years.
The business outlook remains challenging amid economic uncertainty and geopolitical concerns in some markets, Singapore Airlines said.
Singapore Airlines faces competition from Persian Gulf-based carriers such as Emirates Airline and Qatar Airways on its main routes to Europe and the U.S., while discount carriers have taken away some of its passengers on shorter regional routes. That has forced the carrier to offer more discounts to fill its planes.
The flag carrier's passenger load factor, or the portion of planes filled, was higher at 80% in the June quarter, compared with 75.8% in the same period last year, Singapore Airlines said.
All group airlines and its cargo unit turned in a profit during the first quarter, though operating profit at its discount carrier business and also SilkAir, the regional full-service carrier, declined in the period.
Write to Gaurav Raghuvanshi at firstname.lastname@example.org
(END) Dow Jones Newswires
July 27, 2017 07:15 ET (11:15 GMT)