SIA reports net loss of S$307m in Q1, first quarterly loss in 6 years

[SuperJonJon]

From ChannelNewsAsia site

Singapore Airlines has reported a net loss of S$307.1 million in the first quarter, the first such loss since the SARS crisis in 2003.

The airline said the global economic slowdown and the outbreak of H1N1 flu contributed to the decline in cargo and passenger demand. Fuel hedging also added to the loss.

The net loss for the three months ended June 30 compared with a net profit of S$358.6 million a year earlier.

Revenue fell 30.5 per cent to S$2.87 billion from S$4.13 billion a year ago.

The airline said it has taken several steps to contain costs, including a freeze on hiring, unpaid leave, wage cuts and deferment of non-essential projects.

The company has also adjusted capacity to match demand during the quarter, by suspending services and reducing frequencies on various routes.

It said though the price of jet fuel is less than half its peak last year, it remains volatile. However, it added that hedging losses are expected to taper off over the course of the financial year as they are settled.

Air cargo carriage has also stabilised in the last few months. However, SIA said the outlook for air cargo remains challenging, with yields expected to remain under pressure from excess capacity in the market.

The airline said: "The group's first quarter performance reflected the adverse business conditions for airlines. If these conditions continue, the group expects to make a loss for the full year."

As a result of the loss, SIA will cut employees' salaries, saving an estimated S$60m for the current financial year.

However, it said its cash position remains strong and it does not need to raise capital.

[fumitani]

Their pricing strategy and outrageous Fuel Surcharge finally put them in the RED!!!!

No wonder they opened up F inventory on the A380.

[trekkie]

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[Kyo]

This is what happens when the basic building block of customer loyalty - miles (the majority of which will probably end up getting slotted into KF anyway) is taken away...

Even if some pax don't fly much or don't know much about flying in general, they at least felt that they got 'something' out of the airline... whether or not they have sufficient miles to use (and if they don't, they may fly more to achieve the miles sufficient to do something with). 50-70% of miles for promo fares, and I think they'd find themselves in a more profitable state, especially in the mid-long term.

Miles are fundamental. When employed with a mileage-depleting strategy like the 25% discount on online redemptions, I think it's a very workable strategy.

They should also have done away with/reduced significantly the ridiculous fuel surcharges.

[Nick C]

Ouch.

http://www.singaporeair.com/saa/en_U...se1QFY0910.pdf

LF is now 71.6% from 76.7% whereas breakeven LF is 84.3% from 70.2%.

[benlee]

Actually, I think it's just the economy. Less people flying esp the premium class passengers. So of course airlines makes less. Lots of airlines are in the Red, not just SQ.

[SMK77]

They don't deserve any better numbers - they still are zero-ing out inventory for flights that are literally empty. Even people that want to get on their planes cannot... What a f***ing nonsense...

[milehighj]

At the risk of sounding like a broken record or a round-the-nuts, errr I mean moon, EK flyer...

I do feel sorry for the rank-and-file front-end staff who are (mostly) the best in the business.

I have no sympathy whatsoever for the management who screwed over their loyal customers and, ultimately, their company. What goes around comes around.

[LionCity]

At the risk of sounding like a broken record or a round-the-nuts, errr I mean moon, EK flyer...

I do feel sorry for the rank-and-file front-end staff who are (mostly) the best in the business.

I have no sympathy whatsoever for the management who screwed over their loyal customers and, ultimately, their company. What goes around comes around.

Same here too. No sympathies for those who drive the changes in PPS on an overgear. The low ranking front line staff are the cannon fodder.

[bmchris]

I have no sympathy whatsoever for the management who screwed over their loyal customers and, ultimately, their company. What goes around comes around.

The great thing is that they can shift the blame from themselves to the economy. And when the economy turns around, they'll say it was their efforts in reacting to the economy!

[uglymale]

more miles would be nice, but i don't think the frequent flyer program should be the driver for customer loyalty.

instead, i believe SQ should focus on restoring quality in-flight service. i know pax in First and Biz classes still get top-notch treatment (based on the many positive experiences posted on this forum), but pax in Economy are starting to realize that the Y product is only mediocre and not worth the premium over other airlines.

i base my assertion on a totally non-scientific point by point comparison with NH's Y product based on a recent personal experiences. (i do the SIN/JFK route often)

overall, SQ wins on average fleet age, newer aircraft/cabin interior/AVOD equipment (not true on SQ26 btw), and little extras e.g. amenity kits, complimentary toiletries and figure hugging uniforms

however, in many other areas - those that matter to me more - i find SQ lacking. (again, i would like to remind everyone i am referring to the Y product) one very good example is drink and meal service:

nowadays, SQ incorporates what i call a "half past six" drink service where the CAs load up trays of beverages (most commonly orange juice, water and cabin-temperature beer if i'm lucky) in half filled cups to serve to the Y pax. if you ask for something exotic, like apple or tomato juice, you'll probably be told "i'll come back later, sir".

i also cannot remember when was the last time i looked forward to a SQ meal service. after a few flights, all their meals chicken and beef meals start tasting the same >_<

not so on NH. the drink services are full push-the-cart type with "real" assortment of drinks including exotics like chilled green tea, at least 4 choices of beer, wine incl bubbly wine etc, and yes, you get a nicely chilled whole can(!). and you know what's sweet about NH? on a number of drink services, once they reach the end of cabin, they return to the front and do it all over again for seconds!

and the meals, i never fail to be surprised. on my last flight, i got served sukiyaki (stewed beef on rice). this time round, i had some korean bbq ribs thing on rice and they even supplied the half cooked egg to put on top. finally, the deal breaker: ice cream... NH still serves haagen daz... SQ? Walls.

i am not too fussy with seats (hey, what do you expect in Y); and NH's AVOD does not match Krisworld, but it is not exactly bad either. i get the impression that SQ is depending too much on Krisworld to keep Y pax satisfied.

i would like to point out one other weird comparison point: the in-flight shopping catalog. i am not a hardcore shopper, i think that NH's catalog has a better assortment of goods and is better presented/designed. there is a lot of emphasis on NH-exclusive brand-name cosmetics and accessories which do a better job of tempting people to spend (which is kind of helping them pass time too). people actually buy them because they do make nice gifts to ladies and hey, i can actually ebay it off here for a significant markup.


with all that said, i firmly believe that SQ's product is only so-so. (after a year of delusion where i repeatedly asking myself "am i sure? is SQ really not the best??")

in fact, i dare to say the people in Y are only flying SQ because 1) national pride (that's me), 2) base their choice on SQ's past reputations, 3) fly via Changi, 4) mileage-related reasons.

yes, I have a Krisflyer card. but lately, all the miles accredited to it seem to be from *A partners.... *remembers a time when there was free-flow champagne served in the Y cabin

p/s: please comment. don't flame me.

[MAN Flyer]

Actually, I think it's just the economy.

Not all of it I'm afraid. Obviously they are taking a serious hit because of the economy, as everyone is. But they gambled a lot on the decision a couple of years ago to destroy the PPS programme. There are a lot of ex-QPP's/TPP's still flying an awful lot who no longer fly much or at all on SQ since they destroyed it. So they are huting more than they should be at the moment.

As others have said, the fabulous crews still make them a great airline to fly, but the management have managed to p*ss a large number of previously loyal and (still very) frequent travelling pax off in the last few years.

[sumitsan]

nowadays, SQ incorporates what i call a "half past six" drink service where the CAs load up trays of beverages (most commonly orange juice, water and cabin-temperature beer if i'm lucky) in half filled cups to serve to the Y pax. if you ask for something exotic, like apple or tomato juice, you'll probably be told "i'll come back later, sir".

I can agree with that as far as SQ26 goes (had a similar experience), but other routes I've taken had better service and more variety of beverages/beer, even in Y.

[Centurionman]

Their pricing strategy and outrageous Fuel Surcharge finally put them in the RED!!!!

Exactly. They could have stayed in the black but have driven away so many customers based on the fare alone.

Forget the service - they are amongst the best and that doesn't need to change. When it comes to booking time I look at a couple of things.

1) Price
2) Connections and convenience

And if a decent quality competitor is offering me a fare at $3kAU less for the same cabin with arguably better additional features (limo etc) and consistency of product - guess where my business is going. eg. EK, VS etc.

[benlee]

i also cannot remember when was the last time i looked forward to a SQ meal service. after a few flights, all their meals chicken and beef meals start tasting the same >_<

I can totally related to that

FA : Do you want beef with noddles or chicken with rice?