An Airbus A350-941 from Singapore Airlines is preparing to take off on the runway at Barcelona-El Prat Airport in Barcelona, Spain, on May 1, 2024.
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Shares of Singapore Airlines dropped after the city-state’s flag carrier reported a fall of almost 50% in net profit for its first half April to September period, citing lower yields and growing competition.
As markets opened on Monday, the stock fell 6.2%, before later recovering to trade lower at a 3.72% loss.
Net profit in the first half of the fiscal year came in at 742 million Singapore dollars ($559.12 million), 48.5% lower than the SG$1.44 billion in the same period a year ago.
Operating profit for the airline fell 48.8% to SG$796 million, down from SG$1.55 billion a year ago, while revenue increased 3.7% to SG$9.5 billion.
Despite the reduction in profit, the airline maintained an interim dividend of 10 Singapore cents a share.
Singapore Airlines said in a release that the fall in operating profit was due to “increased capacity and stronger competition in key markets,” which led to a fall in yields and ultimately, profit.
While the demand for air travel is expected to be robust in the second half of the financial year, “the operating landscape will continue to be competitive,” SIA added.
Last Monday, SIA announced a $1.1 billion SGD cabin retrofit program for its 41 long range and ultra long range Airbus A350 jets.
The airline said the first retrofitted long range jet will come into service by 2026, and the program will be complete by 2030.