SIA's FY19 profit could increase by $40m over reshuffling scheme

Scoot could boost pricing from the additional routes to enhance profitability for the group.

Singapore Airlines (SIA) could gain 6% or $40m more net profit in FY19 after its reshuffling scheme of some SilkAir flights to Scoot, UOB Kay Hian (UOBKH) noted. By FY20, the transaction could boost the firm’s net profit by 9% or $78m, UOBKH added.

“If Scoot is able to boost pricing or ancillary revenue from the additional routes, then the transfer of such routes could be accretive and group profitability could be enhanced,” the research firm explained, noting that SilkAir’s yields as of H1 FY19 stood at around 90% higher than that of Scoot.

Meanwhile, UOBKH noted that SIA’s ending cash crashed 40% in H1 FY19 despite the group taking on a $1.38b debt

“We expect SIA's full-year total debt to rise by S$2.6b to S$6.9b and interest cost to more than double in FY20 to S$304m,” the research firm commented.

SIA’s reshuffling scheme will affect about 100 SilkAir staff members. According to a Channel News Asia report, SilkAir will be working with said employees for "possible placement opportunities in other SIA stations" and will also work with Scoot, general sales agents and ground handling agents on job options that may be available with them.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia