Singapore Airlines reports higher profits but future outlook hinges on Scoot & Tigerair improvements

The Singapore Airlines Group turned a SGD111 million (USD83 million) operating profit for the three months ending 30-Jun-2015 (1QFY2016), marking its best first quarter showing since 2011. An operating profit of SGD108 million (USD81 million) at the parent airline drove the overall result. Full service regional subsidiary SilkAir also remained in the black while the group's two LCC subsidiaries Tigerair and Scoot, were break-even and incurred a SGD20 million (USD15 million) operating loss respectively.

But the outlook for Tigerair and Scoot should brighten as the two carriers continue to pursue closer cooperation. Scoot should also see a significant improvement after it completes the transition to an all-787 fleet and expands its operation, enabling it to achieve higher economies of scale.

Scoot plans to phase out its last 777 in the current quarter and nearly double the size of its fleet during FY2016 from six to 11 aircraft. The loss reported for Scoot for 1QFY2016 marks the first time SIA has reported financials for the long-haul LCC since it launched in mid-2012.