SIA quarterly profit down 8.6% amid falling cargo revenue

Singapore Airlines' group operating profit fell by 8.6% to S$213m in its Q2, as cargo declines impaired revenue growth and costs were inflated by capacity expansion and a higher fuel bill. Expenditure increased by S$180m or 4.7%, "mainly from capacity injection", in the three months ended 30 September, notes the group. Revenue, meanwhile, was up S$160mi or 3.9%, as a passenger revenue rise of S$244m was offset by a S$93m fall in cargo revenue. Net fuel costs were S$20m higher. The operating profit generated by SIA's mainline business was down 1.7% at S$233m. SilkAir's operating result was unchanged. The regional subsidiary made a loss of S$3m as higher revenue "was matched by an increase in expenditure partly contributed by the 737 Max 8 grounding". In its outlook, the group predicts that passenger bookings in the coming months will be stronger year-on-year and that yields will be supported by premium-cabin traffic. "However, headwinds persist," it warns, citing intensifying competition and an uncertain global economic outlook.<br/>