Singapore Airlines Ltd. (C6L.SG) said it swung to a net loss for the fiscal fourth quarter, citing intense competition and provisions for an anticompetition ruling against its cargo unit.
The Singapore flag carrier reported a net loss of 138.3 million Singapore dollars (US$99.5 million) in the quarter ended March, compared with a net profit of S$224.7 million in the same period last year. Revenue was flat at S$3.72 billion (US$2.68 billion), Singapore Airlines said in a regulatory filing Thursday.
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The company made a provision of S$132 million for "competition-related matters" at its cargo unit and had accounted for a S$117 million refund of a fine the previous year, Singapore Airlines said.
The airline said in March that the European Commission has re-adopted a decision in an air-cargo case involving several airlines and imposed a 74.8 million euro (US$83.5 million) administrative fine on Singapore Airlines Cargo, for which it will make a provision. Singapore Airlines Cargo said at the time that it will "study the grounds of the decision, after which it will consider an appropriate course of action."
Apart from the one-time items, the carrier reported an operating loss of S$41 million in the quarter, compared with a S$98 million profit the previous year. Its other airline units remained profitable in the fourth quarter.
For the full year, Singapore Airlines said net profit fell to S$360.4 million from S$804.4 million in the financial year ended March 31, 2016. The company will pay a final dividend of 11 Singapore cents a share (7.9 U.S. cents), taking the total payout for the year to 20 Singapore cents, less than half the 45 Singapore cents it paid the previous fiscal year.
"Intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, continue to exert pressure on yields," Singapore Airlines said.
The carrier's passenger yield, or the average fare paid per passenger for each kilometer flown, declined 3.8% to 10.2 Singapore cents. Yields, a key measure of an airline's ability to generate revenue, have been falling for several years. Competition, especially from Persian Gulf-based carriers such as Emirates Airline and Qatar Airways, has forced Singapore Airlines to sell cheaper tickets on its key American and European routes. Regionally, discount carriers have taken away passengers, especially leisure travelers.
Singapore Airlines said its annual passenger load factor, or the percentage of seats filled, declined slightly to 79% from 79.6% previously. It would have had to fill 80.4% of its seats to break even.
The company said it has launched a review of its fleet and network for sustainable growth.
Write to Gaurav Raghuvanshi at email@example.com
(END) Dow Jones Newswires
May 18, 2017 07:39 ET (11:39 GMT)