Higher costs badger SIA's supposed gains

Its cost per available seat km rose 3.8% YoY.

Singapore Airlines was dragged down by higher unit costs or cost per available seat km (CASK) in the past quarter, leading to a decline in its bottom line.

According to CIMB analyst Raymond Yap, the reported net profit for the past quarter fell to $235m from $257m last year.

Whilst the group's loads rose 4.2 percentage points to 80%, it could not offset the 1.9% yoy fall in yields and a 3.8% yoy rise in CASK.

"Unit costs for handling charges and maintenance rose around 10% yoy. While spot fuel prices rose, hedging losses fell, hence unit fuel costs rose only 1% yoy," Yap noted.

SilkAir and Budget Aviation Holdings both saw its yearly yield decline more than offsetting load improvements, leading to lower yoy revenue per available seat km (RASK). At the same time, CASK rose YoY, leading to a pincer-like squeeze on profits.

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