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SINGAPORE, July 30 Singapore Airlines Ltd (SIA)
reported a 52 percent fall in its first-quarter
operating profit, missing analysts' forecasts, as intense
competition for passengers and cargo squeezed yields at Asia's
"Aggressive fares and capacity injections from competitors
will continue to place pressure on yields," the airline said in
a statement on Wednesday.
Battling intense competition from Gulf airlines and discount
carriers, SIA Chief Executive Goh Choon Phong is pushing
Singapore's premium airline into new markets including India,
while increasing the group's exposure to the low-cost segment
through its fully-owned subsidiary Scoot, and affiliate Tiger
Airways Holdings Ltd.
An overcapacity in the global air freight market is also
hitting SIA, whose cargo unit still reported an operating loss.
SIA, which has a market value of $10.3 billion, reported an
operating profit of S$39.5 million ($31.8 million) in the
quarter ended June versus S$81.7 million a year ago.
This compared with an average forecast of S$46.1 million in
a Reuters survey of five analysts, though the estimates varied
widely. One other analyst estimated an operating loss of S$43
"Looking at the competition and what is coming in terms of
capacity, we think that the next 1-2 years will continue to
exert pressure on yields. We will have to manage our costs
better, including fuel costs, in order to stay competitive,"
Stephen Lee, SIA's chairman, said on the sidelines of the
company's shareholders' meeting on Wednesday.
Five analysts have a "sell" rating on SIA, six rate it as a
"buy" and 10 have a "hold" recommendation.
(Reporting by Anshuman Daga; Editing by Miral Fahmy)