Singapore Airlines recovers from loss as profits soared $181.8m in Q4

But it warned of intense competition in key operating markets and cost pressures.

Singapore Airlines (SIA) took off from its $138.3m loss last year as its profits soared to $181.8m in the fourth quarter of 2017. Revenue jumped 8.36% from $3.71b to $4.02b.

According to its financial statement, the parent airline turned around from a loss to an operating profit of $178m, thanks to higher passenger flown revenue ($80m) which was driven by a 1.4% growth in traffic and a 1% increase in passenger yield.

Also read: SIA passenger load factor up 1.9 ppt to 82.7% in April

Revenue was further lifted by higher other incidental income from KrisFlyer programme breakage rate adjustment and compensation for changes in aircraft delivery slots. Meanwhile, its expenses jumped $43 due to higher fuel and staff costs.

SilkAir's profits fell to $3m due to higher costs for fuel, handling, and landing, and parking outpacing revenue gains. Passenger traffic improved 12.8% on the back of an 11.9% expansion in capacity, but yield contracted 11.4%.

Profits from Scoot jumped to $29m, led mainly by higher passenger flown revenue from 16.7% growth in passenger carriage. The yield was 1.6% lower. 

SIA Cargo's profit rose to $28m, thanks to higher revenue boosted by the growth of freight carriage at 4.6% and cargo yield at 8.5%.

Also read: SIA Engineering full-year profits crashed 44.61% to $184.1m

For the full-year, profits jumped 130.27% from $360.4m to $829.9m. Revenue also went up by 6.32% from $14.87b to $15.81b. The increase was mainly attributable to higher operating profit, the absence of SIA Cargo's provision for competition-related matters, and the impairment of the Tigerair brand and trademarks last year.

Passenger flown revenue rose 3.6% to $428m, as traffic growth (+6.3%) outpaced the decline in passenger yield (-3.1%). Cargo revenue was up $266m on higher freight carriage (+5.3%) and yield (+8.9%).

"Despite stronger advance passenger bookings for the coming months and a continued stabilisation in yields, intense competition in key operating markets and cost pressures remain. Fuel prices have been trending higher and volatility is expected to persist in the months ahead," SIA warned.

The directors recommended a final dividend of 30 cents per share to be paid on 15 August 2018.