November 11, 2009
Singapore Airlines has not given up hope of making a profit this financial year as it sees a recovery in premium-class bookings, its chief executive said on Wednesday.
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 restrictions on business travel.
“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 percent of its fuel needs by the end of October from over 30 percent, as it sees oil prices staying at around current levels.
SIA, like 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 percent for the fiscal year starting April.
The airline has also cut staff salaries and working hours.
Chew said the Singapore flag carrier, 55 percent-owned by state investor Temasek, 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 on Tuesday 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 SGD$159 million (USD$114.6 million) compared with a net profit of SGD$324 million a year ago, following a net loss of more than SGD$300 million in the first quarter of this financial 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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