Fine, provisions send Singapore Airlines Q3 net down

Singapore Airlines reported a lower third quarter net profit.

It has been hit by provisions for fines by the European Commission and South Korean regulator, as well as a settlement with U.S. authorities on cargo price-fixing charges.

Taking out the S$199.1 million exceptional items, the carrier, 55 percent owned by Singapore state investor Temasek Holdings , would have seen a 20.7 percent rise in its quarterly profit, as a recovery in the global economy boosted air travel.

The airlines industry, particularly in Asia, has enjoyed a strong rebound in recent months, but rising competition from Asian and Middle Eastern carriers are putting more pressure for SIA going forward.

"Conditions now are significantly tougher and more intimidating, partly due to the rise and proliferation of low cost carriers," said Shukor Yusof, Singapore-based analyst for Standard & Poors.

In a statement, SIA said "as airlines, including SIA continue to inject capacity, advance passenger bookings for the January-March quarter are levelling off."

SIA said during the October-December quarter, Singapore Airlines took delivery of two Airbus A330-300s and reinstated one Boeing 747-400 and one Boeing 777.

But the recent rise in jet fuel prices, which have reached a two-year high, may pose a threat to the recovery, analysts say.


You can read the full story at Reuters.com.