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 the 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 3.72%.
Net profit in the first half of the fiscal year came in at $742 million SGD ($559.12 million), 48.5% lower than the $1.44 billion SGD in the same period a year ago.
Operating profit for the airline fell 48.8% to $796 million SGD, down from $1.55 billion SGD a year ago, while revenue increased 3.7% to $9.5 billion SGD.
Despite the reduction in profit, the airline maintained an interim dividend of 10 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.
