SINGAPORE, Nov 11 — Singapore Airlines (SIA) , the world’s biggest airline by market value, has not given up hope of making a profit this financial year as it sees a recovery in premium-class bookings, its CEO said today.
The airline, which said three months ago that it might post its first full-year loss if business conditions did not improve, said it has seen some recovery in business class bookings as banks relax restriction on business travels.
“We are seeing a definitive pickup in bookings in business class. Banks have started to relax the rules on travel for their executives, so we started to see bankers in suits back in business class and first class,” SIA Chief Executive Chew Choon Seng said at a media briefing.
He said the airline has reduced its fuel hedging to 22 per cent of its fuel needs by the end of October from over 30 per cent, as it sees oil prices staying at around current levels.
SIA, like any other premium airlines, has seen falling passenger and cargo demand this year as a global recession hurt business and leisure travel, forcing it to reduce capacity by 11 per cent for the fiscal year starting April.
The airline has also cut staff salaries and working hours.
Chew said the Singapore flag carrier, 55 per cent-owned by state investor Temasek Holdings, has no plans to cut its capacity further and would reinstate routes that it had cut previously.
He said the company would now focus on generating yields instead of gaining market share.
Singapore Airlines reported yesterday a worse-than-expected quarterly loss as the global economic slowdown hit margins, but the airline said the outlook has improved.
It reported a net loss of S$159 million (RM381.6 million) compared with a net profit of S$324 million a year ago, following a net loss of more than S$300 million in the first quarter of this financial year.
Analysts polled by Thomson Reuters predicted the company to post a full-year profit of S$132.4 million in the financial year of 2009/10 from S$1.06 billion in previous year.
Chew also said that the company was still studying the possibility of listing its budget-carrier unit Tiger Airways and has not set a definitive time frame yet. ? Reuters
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