Outlook still gloomy. Although jet fuel price has corrected, it may still be offset by the progressive settlement of fuel hedges contracted at higher prices. The International Air Transport Association (IATA) has revised upwards its forecast for the airline industry to lose more than US$9b and projected passenger and cargo demand to fall sharply. While advance bookings are lacklustre, SIA has met another setback in the form of uncertainties arising from the H1N1 epidemic. Aggressive promotions, reduced business travel and possible down-trading activities may worsen the situation.
Operating statistics look ugly. Uncertainties arising from the H1N1 flu outbreak since late April 09 have dealt a blow to forward bookings. System-wide passenger carriage in the form of revenue passenger kilometres (RPK) was worse than the reduction in capacity in terms of available seat kilometres (ASK). As a result, passenger load factor (PLF) fell 7.8% to 66.9% while the number of passengers carried plunged 23.7% YoY to 1.2m in May 09. With leading indicators such as China’s Purchasing Manager Index beginning to show positive recovery together with aggressive capacity management, cargo load factor across the region is beginning to recover from a very low base. As the marginal rebound in cargo load factor is too small to compensate for the lacklustre premium numbers, SIA’s next two quarters are likely to be in the red.
Sponsored Links
No comments:
Post a Comment