More flights and passengers at Singapore Changi Airport translated into more business for SATS, the airport's biggest ground-handling firm. However, SATS also had to contend with higher costs and other challenges in the last financial year.
The result was a 10.7 percent slide in net profits to $170.9 million for the fiscal year ending March 31.
SATS reported yesterday that total turnover during the year grew 24.1 percent to $1.69 billion, but spending rose a higher 27.6 percent to $1.52 billion.
Some of this increase was due to the need to hire more staff for its Singapore business, as well as its Hong Kong subsidiary, said president and chief executive officer Tan Chuan Lye.
At Changi, the firm's wholly owned unit, Asia-Pacific Star, which handles mainly low-cost carriers, expanded headcount on the back of brisk business in the budget sector. SATS handles Tiger Airways and Jetstar, two of the three biggest low-cost carriers at the airport.
Recently, SATS also bagged the contract for Scoot, Singapore Airlines' new budget carrier which will start operating next month.
With traffic at Changi, especially in the regional market, expected to continue to grow strongly this year, SATS is looking forward to growth opportunities in this sector, Tan said. It controls 75 percent to 80 percent of Changi's ground-handling market with Dnata handling the remainder.
In June last year, Changi Airport Group awarded a third licence to United States-based Aircraft Service International Group, but the firm has yet to secure a client. Industry watchers do not expect ASIG to affect SATS' business in the next few years.
Overall, the aviation business accounted for 84 percent of the company's total revenue compared with 80 percent in fiscal year 2010/2011.
Copyright 2012 Singapore Press Holdings LimitedAll Rights Reserved
