Airline news updates: fines, profits & a new CEO for Singapore
Singapore Airlines (SIA) was hammered from all sides by foreign regulators this month, with provisions and penalties from the European Union, United States and South Korea taking a S$199.1 million (US$155 million) chunk out of the company’s third quarter net profits.
Quarterly profits would otherwise have increased by 20.7%, at a time when the world’s airlines are beginning to recover but competition is heating up among Asian and Middle Eastern carriers. Profit forecasts are down to a net $9.1 billion from 2010′s $15.1 billion, though still up from 2009′s shocking $9.9 billion total loss.
SIA’s problems with the authorities stemmed from its cargo division, which was fine 74.8 million euros for violating EU competition laws (though it looks set to appeal the decision). The division was also charged with cargo price fixing in the United States, and settled on a fine of $48 million.
Singapore Airlines also appointed a new CEO at the end of 2010, the 47 year old Goh Choon Phong taking over after the seven year reign of Chew Choon Seng. Goh, now one of the youngest CEOs of a major Singaporean company, reportedly surprised observers with his fast rise and extremely low profile.
Singapore-based budget carrier Tiger Airways, itself owned partly by Singapore Airlines, posted a 60% Q3 profit increase to S$22.6 million ($17.66 million) and increased its revenue 22% to S$170.4 million. Increased competition from low-cost airlines are among the more intimidating threats to the ‘traditional’ airline business.
source & articles: Reuters via Yahoo! Singapore
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