Singapore Airlines Q3 profit slumps on cargo fines

SINGAPORE - Singapore Airlines (SIA) said on Friday its fiscal third-quarter net profit fell by almost 29 per cent, mainly due to the anti-trust fines imposed by the European Union, United States and South Korea.

Net profit fell to $288.3 million in the October-December quarter from the $403.7 million in the corresponding period a year earlier.

SIA said it had to set aside $199.1 million to pay fines due to alleged price fixing by its cargo unit. The European Commission, the South Korean Fair Trade Commission and the US Department of Justice Antitrust Division had imposed the fines. The airline said it had appealed against the decisions made by the European Commission and the Korean body.

Excluding the provision for the fines, the airline's net profit would have improved by 21 per cent.

Meanwhile, group revenue rose 12 per cent to $3.84 billion from $3.42 billion in the year-ago period.

Looking ahead, the company said that advance passenger bookings for the final quarter of the 2010-11 financial year were levelling off.

For air cargo, regional differences would continue to be marked in 2011, with strength in the Asia-Pacific region but uncertainties in Europe markets. Growth for air freight was expected to continue for the rest of the financial year, albeit at a slower rate.

The carrier said fuel cost remained its biggest expense item, with jet fuel prices at two-year highs and trending upwards.

Mr Siva Govindasamy, Asia managing editor at Flightglobal, said the fundamental business for SIA remained premium and long-haul. As long as these two markets remain buoyant the airline would continue to do well, he said.

In a separate statement on Friday, SIA's 33-per-cent owned Tiger Airways said fiscal third-quarter net profit rose by about 60 per cent year-on-year due to higher average passenger fares and strict cost management.

The budget carrier made a net profit of $22.6 million in the October-December quarter, up from $14.1 million in the year-ago period. Revenue for the airline, which operates across Asia and Australia, grew 22.2 per cent to $170.4 million during the period.

Tiger said it would maintain its plan to grow its fleet by 40 per cent from 25 aircraft currently to 35 aircraft by March next year.

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