The SIA Group reported an operating profit of $623m in the 2016-17 financial year, $58m or 8.5% lower compared to the same period last year. Full year net profit fell by 55.2%, to $360m, attributable in part to the net loss recorded in the fourth quarter, as the group fought to deal with “intense competition exerting pressure on yields amidst persistent cost pressures”.

Group revenue fell $370m year-on-year to $14.9bn (-2.4%). Passenger flown revenue declined $382m (-3.2%) despite traffic growth (+2.6%) as yields continued to come under intense pressure. Cargo revenue was also down $87m on the back of cargo yield erosion, notwithstanding higher freight carriage.

Other revenue was lower with the absence of income earned upon the release to Airbus of seven aircraft delivery slots recorded in the last financial year. These were mitigated by a one-time credit upon a change in the timing of recognising revenue from unutilised tickets.

Operating profit for the Parent Airline Company declined $99m or 20.4% year-on-year, to $386m.

Besides a weaker operating profit (-$58m), SIA says the deterioration in group net profit was largely attributable to SIA Cargo's provision for competition-related matters (-$132m) and absence of a refund received last year (-$117m).

Looking forward, the carrier says it is braced for intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty, which continue to exert pressure on yields.

On a positive note, the group maintains that strategic initiatives implemented to address structural changes in the industry are now showing positive results. Building on this foundation, the next phase of the SIA Group's transformation has been launched. A dedicated Transformation Office is conducting a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes, to better position the Group for long-term sustainable growth.