SIA's Q2 profit falls 54% to $90m, says outlook challenging

Singapore Airlines, the world’s second-largest carrier by market capitalisation, posted a 54% drop in quarterly net profit on Friday as margins continued to be weak amid uncertain economic conditions in North America and Europe.

SIA earned $90 million in the three months ended September, down from $194 million a year earlier. The results were, however, in line with the $93 million average forecast of four analysts polled by Reuters and better than the $78 million net profit achieved in the April-June quarter.

“The continuing European economic crisis is dampening global business confidence, exerting downward pressure on loads and yields of both passenger and cargo businesses,” the Singapore flag carrier said in a statement.

“These challenging market conditions are exacerbated by high and volatile jet fuel prices,” it added.

SIA cut its interim dividend to 6 cents for the half year ended September, down from the previous year’s 10 cents.

SIA’s profits have been crimped in recent quarters by high fuel costs and increased competition from Middle Eastern carriers such as Emirates on longer routes at a time when passengers in the West have become more cost-conscious.

Within Asia, the carrier is facing heightened competition from budget carriers such as Malaysia’s AirAsia and Qantas Airways’ JetStar unit.