Source: Channel NewsAsia Author: Timothy Ouyang 02/02/2010
Subject Concerned: Airlines Human Resource Cargo
Singapore Airlines (SIA) is restoring part of the pay cuts introduced in August last year.
Staff of the airline took a pay cut of 10 per cent, but now SIA is restoring 2.5 per cent. The restoration will take effect immediately, and will be reviewed in three months' time.
The announcement came after SIA booked its best quarterly earnings in two years. At the group level, net profit for its fiscal third quarter ended December rose by 19.7 per cent on-year to S$404 million.
The numbers have given SIA hopes that it may be on course to avert its first ever annual loss. The carrier had earlier warned that for the first time in its corporate history, it could be in the red on an annual basis. But it looks like it has flown out of turbulence - at least for now.
It has clearly been a tough fiscal year for SIA. Like other carriers worldwide, it has been hit by the worst downturn in the airline industry.
Falling demand - in both the passenger and cargo fronts - as well as millions of dollars on fuel hedging losses kept SIA in the red for the first two quarters of its fiscal year.
Going forward, SIA said it expects the recovery in demand to continue into the fourth quarter. But it added a note of caution: "The business outlook for the group in 2010 is encouraging, but it must be acknowledged that uncertainties linger over the global economy."
Some analysts Channel NewsAsia spoke to said that SIA's cost-cutting measures will continue to provide some support for the group.
SIA Group announced after markets closed that its third-quarter revenue came in at S$3.418 billion, down 17.9 per cent compared to a year ago, but 10.9 per cent higher than the second quarter.
This was boosted by higher load factors and yields as well as lower fuel hedging losses.
Parent airline SIA booked operating profits in the third quarter of some S$231 million after posting losses of some S$428 million in the first half of this year.
Its regional arm SilkAir recorded profits of some S$23 million.
Meanwhile, SIA Cargo posted S$40 million in operating profits, while SIA Engineering company's profits came in at S$22 million.