The airline said the poorer-than-expected results were due to a “challenging and uncertain global economic outlook.” SIA cited soft demand in key markets such as the Americas and Europe, due to intense competition and 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 said.

SIA yearly revenue for 2014 fell 0.2% to S$15 billion while expenses dropped 1.3% to S$14 billion, producing an operating profit of $410 million, up 58% from a S$259 million operating profit in the prior year.

The airline saw passenger revenue rise 0.9%, driven by increased passengers numbers (up 0.2%) and slightly higher yields (up 0.9%).

However, the improvement in operating profits was eroded by weak results from joint venture and associated companies, which cost the Group S$126 million.

The airline has said it will continue to “adjust capacity to match demand” and will expand its current 116 destinations to 119, although both SIA and subsidiary SilkAir plan capacity cuts in coming months due to falling demand for their premium products.

The carrier also hinted at expanding its low-cost carrier (LCC) segment to counter strong local competition. “To meet the challenges ahead, the Group will ... enhance product offerings and leverage [our] subsidiaries to tap demand across a diverse range of travel segments,” it said.（Jeremy Torr）