Singapore Air rivals squeeze for passengers amid yield drop

SIA is fighting to prevent travellers from switching to Emirates Airline, which is offering luxuries like on-board shower, while budget carriers are chipping away at the coach class. The result: The lowest yield from passengers in six years. Yields were 10.6 Singapore cents in the year ended March, dropping from 11.2 cents a year earlier. That damped full-year net income to S$804m, or about a quarter of what Emirates racked up in the same period. Southeast Asia’s biggest airline by market value is facing increasing challenges to retain customers as the Middle East carriers expand more into the region and about a dozen low-fare offerings seek to win business on short-haul routes from Singapore to resorts like Bali and Phuket. To fight back, CEO Goh Choon Phong, 52, has ordered more than $10b of new aircraft and formed alliances from Australia to India as Asia is poised to become the world’s biggest travel market in two decades. “They’re being squeezed in many different fronts,” said Shukor Yusof, founder of aviation consultant Endau Analytics in Malaysia. “The market dynamics have changed forever for Singapore Air.” The flag carrier Thursday reported Q4 profit that lagged behind analyst estimates as losses from fuel-hedging countered gains from carrying more passengers during the Lunar New Year holiday season. Net income jumped more than fivefold to S$224.7m in the quarter ended March, the carrier said. Analysts estimated Singapore Air to report a profit of S$249.2m. "The group is contending with a challenging operating environment in key markets, caused in part by weak economic activity and relatively rapid growth in capacity, evidenced by increasing promotional fare activity," Singapore Air said in the statement. Booking in the current quarter "are tracking positively against seat capacity," it said.<br/>