737 Max grounding hurt SilkAir but SIA Group reports higher net profit, Latest Business News - The New Paper

737 Max grounding hurt SilkAir but SIA Group reports higher net profit

This article is more than 12 months old

The grounding of six Boeing 737 Max 8 jets put a drag on regional carrier SilkAir's first half (H1) showing even as the SIA Group turned in a higher net profit for the same period.

The problematic 737 Max 8 jets - grounded on March 12 this year after two crashes elsewhere killed 346 people - meant SilkAir clocked an operating loss of $19 million for the six months ended Sept 30.

In contrast, SilkAir's loss for the corresponding period last year had been just $3 million.

The carrier's expenditure for the period also rose by $10 million, which was attributed to 737 Max 8-related costs and higher fuel prices.

However, the carrier saw passenger flown revenue growth of 0.9 per cent.

Overall, the airline group - including low-cost carrier Scoot and SIA Engineering - saw net profit rise 5.1 per cent for the six months ended Sept 30, due to higher passenger traffic.

Revenue for the group was up by 5.3 per cent, or $418 million from the previous corresponding period, Singapore Airlines announced yesterday.

For the second financial quarter under review, the group saw a 67.9 per cent jump in profit, or $38 million, to $94 million due to improvement in its share of results from associates and joint ventures.

Low-cost carrier Scoot continued to be in the red, even as it saw higher passenger revenue amid an expansion in capacity.

It clocked a loss of $77 million for the first half, widening its loss from a year ago.

Expenditure rose 8.5 per cent or $74 million, mainly due to higher depreciation from a larger fleet. The carrier continued to proactively reduce aircraft utilisation during the period to improve operational resilience, SIA said.

It saw an operating loss of $39 million for the second financial quarter.

The group expects passenger booking in the coming months to be stronger year-on-year, but will see headwinds from intensifying competition in key operating markets as well as uncertain global economic outlook. - THE STRAITS TIMES