Singapore Airlines Group (SIA) reported a FY2016-17 net profit of S$360 million ($259 million) for the fiscal year through March 31, down 55% from S$804.4 million in the previous year.

SIA attributed the loss in part to the fourth-quarter net loss of S$138 million, reversed from a net profit of S$225 million in the FY2015-16 period.

Group revenue fell 2.4% year-over-year (YOY) to S$14.9 billion for the financial year. Expenses were down 2.1% YOY to S$14.2 million, producing an operating profit of S$622.8 million, down 8.6% YOY.

SIA said, “Passenger flown revenue declined S$382 million (-3.2%) despite traffic growth (+2.6%) as yields continued to come under intense pressure. Cargo revenue was also down S$87 million on the back of cargo yield erosion, notwithstanding higher freight carriage. Other revenue was lower with the absence of income earned upon the release to Airbus of seven aircraft delivery slots recorded in the last financial year. These were mitigated by a one-time credit upon a change in the timing of recognizing revenue from unutilized tickets.”

For the full year, parent carrier Singapore Airline’s operating profit was S$386 million, down 20% YOY. SilkAir saw its operating profit increase 11% YOY to S$101 million. Budget Aviation Holdings—comprising Scoot and Tigerair—posted an operating profit of S$67 million for the financial year, up 60% YOY.

SIA said the outlook is for further pressure on yields, as a result of “intense competition arising from excess capacity in major markets, alongside geopolitical and economic uncertainty.”

Singapore Airlines is scheduled to take delivery of 10 Airbus A350s and three Airbus A380s in the 2017–18 fiscal year. All of these, except one A380, will enter service by March 31, 2018. Two A330-300s; four A380s; two Boeing 777-200s; and one 777-200ER are scheduled to be phased out.

The A380s are being returned as their leases expire. This move was expected, since SIA had already confirmed it would not extend the lease on the first of the A380s, and was considering its options on four others. These five aircraft were the first to be delivered to the carrier, and are under 10-year leases.

After these changes, the parent carrier’s fleet is expected to grow to 109 aircraft by March 31, up from 106 a year earlier.

SilkAir will take delivery of its first four Boeing 737 MAX aircraft during this financial year, lifting its fleet to 34 aircraft. Budget Aviation Holdings is to add four more Boeing 787s, and will take back three A320s that had been subleased to IndiGo. Two A320s will be removed from service. The Budget Aviation fleet total will rise to 40 aircraft.