SIA Engineering posts quarterly loss as costs outpace revenue recovery

SIA Engineering sank back to the red in its third-quarter earnings, as a rise in costs — caused by a drop in government wage support — outpaced revenue recovery. For the three months to 31 December 2021, the MRO unit of Singapore Airlines reported an operating loss of S$7.8m ($5.8m), reversing the S$1.1m profit it made in 2020. Revenue for the quarter rose nearly 34% year on year to S$140m, amid a 65% increase in flights handled in SIAEC’s Singapore base. The “continuing recovery trend” — led by gradual reopening of international borders — is “encouraging”, notes SIAEC. Its base maintenance division saw an increase in checks compared to the same quarter in 2020, “but the work content of these checks was lighter as a higher proportion of the checks performed were for young new-generation aircraft”. The company also notes that business activity at its engine joint ventures in the region have also picked up. However, any upswing in revenue was offset by a sharper rise in expenses: at about 43% year on year to S$148m. SIAEC attributes the cost increase to a reduction in wage support measures. Despite making an operating loss, SIAEC posted a net profit of S$33m, compared to the S$7.7m net profit it made in 2020. <br/>