Singapore Airlines Ltd., Asia’s third-largest carrier by market value, said second-quarter profit fell after a budget airline unit had losses.
Net income in the three months ended September dropped 43 percent to S$90.9 million ($70 million), the carrier said in a statement to the Singapore stock exchange today. Sales were little changed at S$3.9 billion.
Singapore Air, facing competition from Middle East carriers like Emirates for business-class travelers, had a S$104 million loss from associated companies, largely due to Tiger Airways Holdings Ltd. Travel demand to Thailand has eased since the May imposition of martial law, while low-fare carriers are luring passengers with cheaper ticket prices.
“Demand is generally flat and yields will remain under pressure amid intense competition from other airlines and promotional activities in weaker markets,” the company said in the statement.
Singapore Air shares rose 0.2 percent to S$10.15. Six of 23 analysts recommend investors buy the stock, according to data compiled by Bloomberg. Seven say sell and 10 suggest holding the stock.
Earlier this year, the airline canceled 43 flights to Bangkok as political unrest in Thailand intensified. The number of tourists in Thailand in the first nine months dropped 16 percent from a year ago.
Tiger Air, 40 percent owned by Singapore Air, said Oct. 17 it had a loss of S$182.4 million in the quarter ended in June, compared with a S$23.8 million profit a year earlier. Singapore Air will raise its stake in the budget airline to about 55 percent by converting some securities into shares and then buy as much S$140 million of additional stock in a rights offering.
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