China's West Air to start its thrice-weekly service to Singapore

By

Angela Tanangelat@sph.com.sg

FEB 4, 201610:41 AM

WEST Air, a Chongqing-based airline, will start its thrice-a-week service between Singapore and the Western Chinese city, beginning with an inaugural flight expected to arrive in the city-state on Thursday.

The new service, on an Airbus A320-200 with a capacity of 180 seats, represents the Chinese carrier's first international service. It comes on the back of a bilateral pledge to grow air connectivity between Singapore and Chongqing - famed as a starting point for the Yangtze River cruise.

On Jan 8, 2016, Changi Airport Group (CAG), Chongqing Airport Group, SilkAir, Air China Ltd Chongqing Branch, China West Air, and Chongqing Airlines entered into a six-party Memorandum of Strategic Cooperation to enhance air connectivity between Western China and Singapore.

Under the memorandum, both airports will work closely with the airline partners to mount new flights and increase flight frequencies, not just between Singapore and Chongqing, but also to boost transfer traffic via both hubs.

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Both airports will support the airlines to develop connectivity from cities in Western China (such as Urumqi, Xining and Lhasa) via Chongqing to Singapore, cultivating the aviation market between Singapore and relevant cities under China's "One Belt, One Road" plan.

CAG said it has been expanding Changi's connectivity to China's emerging cities. Four new Chinese city links were added to the airport's network in 2015 - Sanya, Changchun, Quanzhou and Yinchuan. In 2015, China traffic grew a healthy 7 per cent year on year, while compounded annual growth (CAGR) for the 2010-2015 period was a robust 8 per cent.

    
 

Shell reports profits plunge on oil price slump

Royal Dutch Shell on Thursday announced an 87-per cent plunge in annual net profits on slumping oil prices. 

PHOTO: REUTERS

FEB 4, 20164:25 PM

[LONDON] Royal Dutch Shell on Thursday announced an 87-per cent plunge in annual net profits on slumping oil prices.

The Anglo-Dutch group reported profit after tax of US$1.94 billion for 2015, compared with almost US$15 billion the previous year, Shell said in a statement.

The slump had been expected after Shell announced two weeks ago that it foresaw annual profit of between US$1.6 billion and US$2.0 billion.

Thursday's update comes as Shell is slashing thousands of jobs, selling assets worth billions of dollars and exiting projects as oil prices tumble on world markets.

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The company is meanwhile close to completing a mega-takeover of British rival BG Group.

"We are making substantial changes in the company, reorganising... and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices," Royal Dutch Shell chief executive Ben van Beurden said in Thursday's earnings statement.

"As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies." Shell added that profit on a current cost-of-supplies (CCS) basis - which strips out changes to the value of its oil and gas inventories - slumped by 53 per cent in 2015 to around US$10.7 billion.

The company is very near to finalising a £47-billion (US$68-billion) takeover of smaller British rival BG Group after the pair won shareholder backing and cleared regulatory hurdles.

The deal is intended at strengthening Shell's position in the liquefied natural gas (LNG) market.

"The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns," van Beurden said Thursday, echoing recent comments.

World oil prices have shed about three-quarters of their value in around 18 months, mainly owing to a global supply glut but also because of weak demand growth and a strong dollar.

The crash in oil prices has been felt sector wide, with Norwegian oil giant Statoil on Thursday saying it was slashing investments and stepping up a cost-cutting programme after recording a huge annual loss of its own for 2015.

Oil companies have been downsizing staff and mothballing drilling rigs in response to a drop in oil prices from more than US$100 a barrel in July 2014 to about US$30 currently.

On Tuesday, US energy giant ExxonMobil announced plans to slash its capital budget and suspend a share repurchase programme.

The same day, British group BP posted its biggest loss in at least 20 years and announced plans to axe 3,000 jobs.

AFP

    
 

Mitsui lowers profit forecast amid rout in commodity market

Mitsui & Co, Japan's second-biggest trading house, lowered its full-year forecast 21 per cent amid a collapse in commodity prices. 

PHOTO: REUTERS

FEB 4, 20162:01 PM

[TOKYO] Mitsui & Co, Japan's second-biggest trading house, lowered its full-year forecast 21 per cent amid a collapse in commodity prices.

The company expects a profit of 190 billion yen (S$2.2 billion) in the financial year to March, down from its previous forecast of 240 billion yen, according to a statement Thursday.

The company cited the drop in iron ore, oil and natural gas prices as the reasons behind the revision.

"The downturn in iron ore prices will drag out considerably," Mitsui Chief Financial Officer Keigo Matsubara said Thursday. "It will likely continue until about 2020 due to a delay in China's economic recovery."

Ore with 62 per cent content delivered to Qingdao has dropped 28 per cent since last year, according to Metal Bulletin Ltd.

Mitsui's net income was 3.8 billion yen for the three months ended Dec 31, down from 31.8 billion yen a year ago, according to calculations based on nine-month results.

That was the lowest quarterly profit since 2009 The global commodity slump is squeezing the balance sheets of Japan's general trading companies, which invested in metals and energy only to see prices fall. 

A wave of writedowns is forecast for Japan's trading houses, with Sumitomo Corp saying last month it expects a 77 billion-yen charge on its Madagascan nickel project.

The Bloomberg Commodity Index, a measure of returns from 22 constituents, has tumbled 40 per cent over the last two years.

Rivals Mitsubishi Corp and Itochu Corp maintained full-year profit forecasts.

Mitsubishi will review its assets as low prices have forced it to cut its price outlook on commodities, CFO Shuma Uchino said during a briefing in Tokyo on Tuesday.

Mitsubishi will proceed with cost reduction measures for its Australian coal business, he said.

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