Singapore Airlines (SIA) faces a bleak outlook for its fiscal second half as fuel prices remain high and yields are at risk of dropping further due to the challenging economic conditions Europe. SIA mainline yields dropped 1% in the quarter ending 30-Sep-2011 (2QFY2011/12) despite the increase in fuel prices, suggesting passenger yields have peaked in the current cycle some 9% below pre-GFC levels in 2QFY2008/09.

In speaking to analysts during the group's 2QFY2011/12 earnings briefing, SIA CEO Goh Choon Phong warned the market conditions currently facing the carrier are in some respects more challenging than FY2008/09. “I think we are looking at a much more protracted type of economic issues now in Europe where we actually do not see any finality at least in how it’s going to go. So it is a protracted situation ... we might have to bear with it for perhaps a longer time than the last one,” Mr Goh said.