Singapore Airlines (SIA) Cargo has reduced its losses to 22 million Singapore dollars ($16.6 million) in 2014 because of recovery in airfreight volumes.
The figure is down from 2013, when it made a loss of 100 million Singapore dollars. Singapore Airlines Group saw its operating profit increase from 359 million Singapore dollars in 2013 to 368 million Singapore dollars in 2014.
The airline as a whole saw profits rise from 256 million Singapore dollars in 2013 to 340 million Singapore dollars in 2014.
The airline says: “Despite global air cargo demand showing early signs of recovery, cargo yields are expected to remain under pressure due to excess capacity in the market. SIA Cargo will continue to manage capacity prudently and actively pursue demand opportunities in special product segments.”
In 2014 cargo volumes remained static at 1.1 million tonnes. Cargo tonne kilometres fell in 2014 to 6.3 billion from 6.4 billion in 2013. The capacity in available tonne kilometres fell to 10 billion in 2014 from 10.3 billion in 2013. The load factor rose by 0.8 percentage points from 62.5 per cent in 2013 to 63.3 per cent in 2014.
The airline says that for 2015 it expects conditions to remain challenging due to weakness in main markets such as the Americas and Europe. It says there is also increased competition from other airlines and currency challenges.
SIA says: “Competition remains intense as other airlines continue to inject capacity with aggressive pricing. Depreciation of key revenue-generating currencies, such as the Australian dollar, Japanese yen and euro, will place further pressure on yield and demand.” It also says the strength of the US dollar will increase operating costs.