Singapore Airlines (SIA) Cargo recorded a wider operating loss in fiscal year 2015-2016 ended March 31, 2016 as yields declined compared with FY2014-2015.
The carrier reported a SGD50 million (US$36 million) operating loss for FY2015-2016 from a loss of SGD22 million in FY2014-2015.
While operating expenses declined SGD168 million, mainly due to lower fuel costs, this could not fully cushion the SGD196 million contraction in revenue, which was driven down by yield erosion of 11.6%, partially offset by higher freight carriage, which rose 2.6%, said SIA in its financial report.
In the four quarter of the fiscal year, SIA Cargo suffered a weaker year-on-year performance as yield reduced by 15.5%, posting a broader operating loss for the period of SGD40 million from SGD5 million year-on-year.
On its operating performance for the fiscal year, SIA Cargo’s airfreight carriage (in load tonne-kilometers) increased 2.6% year-on-year, lagging behind capacity expansion of 4.9%. Load factor dropped 1.4 percentage points to 61.9%.
SIA Cargo maintained a fleet of nine 747-400 freighters as at March 31, 2016. Two of the freighters are due for return to their owners upon expiry of operating leases during the course of FY2016-2017, reducing the fleet size to seven aircraft by the end of March 2017.
Cargo capacity is expected to grow 3% to 4% in view of projected higher bellyhold capacity in FY2016-2017. SIA Cargo said it will continue to deploy capacity to match demand and pursue charter opportunities.
The company said its outlook remains cautious for air cargo amid the economic slowdown in China and ongoing uncertainty surrounding the global economy. “Coupled with ample capacity in the industry, yield remains under pressure. SIA Cargo will continue to focus on higher-yielding product segments,” it added.
Slight improvement in HK’s cargo volumes
On the other hand, Hong Kong-based carriers Cathay Pacific and Dragonair as well as Hong Kong International Airport (HKIA) saw a small increase in the volume of cargo handled in April year-on-year.
The sister airlines carried 147,643 tonnes of cargo and mail in April, an increase of 2.1% compared to the same month last year. The cargo and mail load factor rose by 0.9 percentage points to 63.5%. Capacity, measured in available cargo/mail tonne kilometers, fell by 0.8%, while cargo and mail revenue tonne kilometers (RTKs) rose by 0.6%.
In the first four months of 2016, the tonnage carried fell by 1.8% against a 1.7% increase in capacity and a 3.4% drop in RTKs.
“April saw a better-than-expected performance for our cargo business, at least in terms of tonnage,” said Cathay Pacific general manager for cargo Mark Sutch. “We managed capacity astutely and were able to capture shipments out of key markets, including Mainland China and India, which led to a small improvement in load factor.”
The big issue at the moment is yield, which remains under intense pressure due to the overall softness of the markets and the big increase in competitor capacity, he added.
Likewise, HKIA recorded a slight growth in cargo volume in April 2016. During the month, cargo traffic increased by 1.2% to 365,000 tonnes compared to the same month last year. The growth was mainly attributed to a 10% year-on-year growth in transshipments. Traffic to and from key trading regions in Europe and China increased most significantly in the month.
During the first four months of 2016, cargo traffic decreased by 2.3% to 1.4 million tonnes. On a rolling 12-month basis, this declined 1.2% to 4.35 million tonnes.
Photo: Larsz
