Singapore Airlines to phase out 4 Airbus A380s

Singapore Airlines to phase out 4 Airbus A380s

Most of SIA Cargo's almost 900 employees will be retained in the new cargo division, while some will be transferred to other divisions, said Mr Goh.

SIA said its full-year net profit shrank by 55.2 percent to 360 million Singapore dollars (258.60 million USA dollars) partly due to net loss recorded in the January-March period.

SIA Cargo is being re-integrated as a division back into the SIA group, in a bid to boost efficiency through greater synergies across the broader group, the group announced on Friday morning. SIA, which is under pressure from regional discount carriers and Middle-Eastern rivals, said in February that 2017 will be a challenging year as passenger and cargo yields - a key measure of profitability - remain under stress.

The Singapore Airlines Group (SIA) has reported a 55.2 percent drop in net profit to S$360.4 million for its 2016/17 financial year ending March 31 on revenues of S$14.86 billion. Cathay Pacific has embarked on a three-year revamp to cut costs after reporting its first full-year loss of HK$575 million (S$103 million) in eight years, while Emirates reported earlier this week that profits plunged 82 per cent to $492.2 million for the 2016-2017 financial year.

But SIA Cargo swung to an operating profit of S$3 million for the year, from a S$50 million loss last year, reflecting a broader improvement in the global air freight market. They noted that although load factors received a lift, this had come at the expense of yields.

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The company has set up a new Transformation Office to review its business.

The majority of SIA Cargo's almost 900 employees will be retained in the new Cargo division; some will be transferred to other SIA divisions, said SIA. While the review is not setting out to cut jobs, some positions will become redundant, he said. "For a group of staff for whom alternative job positions have yet to be confirmed, placement opportunities will be facilitated elsewhere in the SIA Group", it said. Seven Boeing 747-400 Freighter aircraft will continue to be operated, while the Cargo Division will continue to manage the passenger aircraft "bellyhold" space for SIA, SilkAir and Scoot.

SIA Cargo was a division of SIA until July 1, 2001, when it was carved out as a separate company, at a point when it was expanding its fleet to 17 freighters.

"The airfreight market has since seen structural change, however, and SIA Cargo's freighter fleet has been "right-sized" in recent years to the current seven aircraft while the proportion of revenue from passenger aircraft "bellyhold" capacity has increased significantly", said SIA in its announcement.

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