SINGAPORE: Singapore Airlines’ shares fell by as much as 5.5 per cent on Friday (July 27), their biggest one-day drop in over a year, after the carrier reported a lower-than-expected first-quarter profit the day before.
Analysts have cut their forecasts for the remainder of the year after SIA reported a 3.2 per cent decline in first-quarter passenger yields, a proxy for airfares, which bucked expectations for a rise that was seen in the broader global airline industry.
Advertisement"Passenger yields could remain under pressure given SIA Group's more aggressive capacity expansion this year, especially on long-haul routes to Europe and North America," said Ms Corrine Png, CEO of transport research firm Crucial Perspective.
SIA fell by as much as 5.5 per cent to S$10.21 during intraday trading on Friday before ending the day at S$10.22.
A day earlier, SIA had reported that group net profit fell by nearly 59 per cent to S$139.6 million in the first quarter, from a revised figure of S$338 million in the same period last year.
The decline throws a spanner in a major three-year turnaround plan announced by SIA last year to stem losses and boost revenue, amid competition from Chinese and Middle Eastern rivals and low-cost carriers.
AdvertisementAdvertisementMaybank analyst Mohshin Aziz said that increased airport charges at the airline's Singapore hub from Jul 1 could further exacerbate pressure on yields, especially for short-haul flights.
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