SIA's profits flounder

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SIA's profits flounder

SIA's profits flounder

Thursday, May 10, 2012
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On board an SIA flight. The airline also recorded a third quarterly loss in its history.
SINGAPORE: Singapore Airlines (SIA) said Thursday it is exploring partnerships in India and China as it looks to guard against increased competition and global economic uncertainty.

"There is always a constant look at how we can be nimble in response to changes in the market," chief executive Goh Choon Phong told reporters a day after the group announced sharply lower profits for the fiscal year to March.

 

SIA's profit slumped 69 per cent year on year to Sg$336 million.

 

The Singapore flag-carrier -- often seen as a bellwether for the airline industry -- also recorded a net loss of Sg$38.2 million in the fourth quarter, only the third quarterly loss in its history.

 

"Specifically for China and India we continue to be working closely with the airlines there, especially those that are in the same alliance," the SIA chief executive said.

 

"The discussions are always ongoing on how we can deepen cooperation. When and at what point we can make any announcements about changes in the way we work with them, we will announce them when it is ready," Goh added.

 

SIA, a member of the Star Alliance along with Air China, last year announced a long-term partnership with Virgin Australia aimed at boosting the carriers' global reach by sharing flights and coordinating schedules.

 

Members of their respective frequent flyer programmes are also able to earn and redeem miles on each other's flights.

 

Goh said it was too early to tell if tie-ups in India and China would be as extensive as that with Virgin Australia.

 

"No single partnership is going to be the same as another... It will depend on the synergies between the two carriers," he said.

 

Goh said SIA, which is about to launch its own fully-owned budget airline Scoot, was unfazed by the growth in low-cost carriers in Southeast Asia.

 

An expanding middle class and robust economic growth have fuelled a low-cost air travel boom in the region, with players like AirAsia, Qantas offshoot Jetstar and Indonesia's Lionair all looking to expand.

 

"We see it as an additional engine of growth rather than competition. The impact of low-cost carriers on SIA itself, frankly we don't see that much impact," the SIA boss told AFP after the briefing.

 

Despite the imminent launch of flights to Sydney and Gold Coast by Scoot in June, Goh said advanced bookings for SIA's flights to Australia have not been affected.

 

Apart from Scoot, SIA also has a 32.84 per cent stake in budget carrier Tiger Airways.