Singapore Airlines outlook warning casts a shadow over air show
By Lisa Barrington, Brenda Goh and Joe Brock
SINGAPORE (Reuters) — A warning from home carrier Singapore Airlines (OTC:SINGY) that ticket prices were coming under pressure as costs are also rising sent its shares down nearly 10% on Wednesday, casting a shadow over the Singapore Airshow.
The Asian airline's biggest one-day share price plunge since the global travel industry ground to a halt in March 2020 because of COVID-19 came after its December quarter earnings missed market expectations on Tuesday.
It underscored broader aviation industry concerns about supply chain constraints and a more cautious outlook in Asia as China's international travel recovers from the pandemic at a slower pace than in much of the rest of the world.
As Airbus, Boeing (NYSE:BA), and COMAC of China looked to seal aircraft purchase deals at Asia's biggest aviation gathering, Singapore Airlines said on Tuesday that high fuel prices, inflationary pressures and supply chain constraints were presenting challenges to airlines globally.
«Passenger yields continue to come under pressure from increased competition as capacity restoration continues across the industry,» the airline added.
The carrier's net profit, while still strong, has fallen for two consecutive quarters after reaching a record in the June quarter last year, when it was buoyed by strong post-pandemic summer travel demand.
«Last year was pent-up demand, revenge travel,» Mabel Kwan, a Singapore-based managing director at Alton Aviation Consultancy, said on the sidelines of the air show.
«The results are looking past the pandemic recovery, fundamentals taking over a little bit, a little bit of tapering to normalisation from that high growth that we had last year,» she added.
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