Singapore Airlines Group attributes reduced operating profit in H1FY2019 to higher fuel costs

    Singapore Airlines Group reported (13-Nov-2018) operating profit decreased 44.1% year-on-year to SGD426 million (USD309.1 million) in H1FY2018/19 due to a 20.4% increase in fuel costs. Passenger revenue increased 5.8% due to an 8.8% increase in traffic, which outpaced growth in capacity of 5.4%, driving load factor up 2.6ppts to 83.6%. RASK increased 1.3%, which the carrier attributed to the positive results of transformation efforts. Cargo revenue increased 7.4% with a 9.7% increase in yields, partially offset by a 2.3% decrease in loads carried. Revenue from engineering services decreased 7.9% due to reduced airframe and fleet management activities. Group expenditure increased 7.6%, predominantly led by higher fuel costs. The average jet fuel price increased 39.5%, partially alleviated by hedging gains compared to losses in 2017. Non fuel costs increased 3%, which the carrier said was “well within the growth in capacity largely contributed by passenger airlines, due to the success of continuing efforts to improve cost efficiency”. The group’s share of losses of associated companies increased, mainly due to the results of Virgin Australia, which were impacted by “major accounting adjustments”.