SATS renews SIA contracts

Singapore - Singapore Airport Terminal Services (SATS) said it renewed its ground handling and inflight catering contracts with Singapore Airlines (SIA).

The existing contracts with SIA will expire in September, with the new contracts taking effect from October 1, local media reported. The contracts are for passenger and ramp handling, aircraft interior cleaning, inflight catering and cabin handling.

The renewal will not have any material impact on its earnings for the current fiscal year, SATS said.

The ground handling company earlier posted record revenues but a 25% slide in profits to S$147 million for the year ended March 31. Revenues were attributed mainly to the acquisition of Singapore Food Industries, which pushed turnover up 10.9% to hit S$1.06 billion.

However, expenditure increased by nearly 14% to S$891.2 million, said SATS in an announcement to the Singapore Exchange on Monday. The additional overhead was a result of the start of operations at Changi Airport's Terminal 3, while contribution from associates fell 50.3% to S$22.2 million due to the weak aviation industry.