Singapore Airlines Cargo outlook 2017: challenges persist following further cuts to freighter fleet

Singapore Airlines Group subsidiary SIA Cargo faces another challenging year as conditions in the cargo market remain unfavourable. SIA Cargo has been unprofitable for seven of the past eight years, with losses further widening in recent quarters.

Cargo capacity has been relatively flat since 2009, with additional belly space from passenger aircraft offsetting freighter reductions. However, yields have been in a steady decline, leading to consistent losses, despite the much smaller freighter operation.

SIA Cargo is cutting its 747-400 freighter fleet in 1QCY2017, to only seven aircraft. At its peak in 2007 SIA Cargo operated 16 747-400 freighters. SIA will need to decide within the next few years whether to cut its freighter operation entirely or start investing in 747 replacements. Further cuts to the freighter fleet are not currently under consideration as operating fewer than seven aircraft would be subscale and inefficient.