Singapore Airlines has reported that its net profit for the second quarter rose almost 80 percent, boosted by the sale of aircraft, spare engines as well as increased passenger traffic.
Asia’s second biggest airline posted a total net profit of S$160 million, an improvement of S$70 million from the corresponding period a year ago.
Group revenue grew S$107 million to S$3,901 million, on the back of five percent growth in passenger numbers, and the airline earned an operating profit of $87 million.
On the cost side, expenditure rose S$90 million to S$3,814 million. The increase was principally due to higher staff and non-fuel variable costs which rose in line with the increase in capacity.
The carrier warned it was facing tough competition and a strong Singapore dollar.
“The operating landscape for the airline industry remains challenging amid continued global economic uncertainty,” it said. “Advance bookings for the coming months are projected to be higher compared to the same period last year on the back of efforts to boost loads. However, ongoing promotional activities necessitated by intense competition and a strong Singapore dollar are expected to place pressure on yields.
“Cargo demand is expected to remain flat due to weak international trade volumes and excess capacity in the market. Cargo yields are therefore likely to remain under pressure.
“On the cost side, fuel prices are likely to remain high and volatile.
“Against this challenging backdrop, the Group’s financial condition remains strong. The Group will continue to monitor market conditions closely and respond appropriately, while maintaining vigilance in cost management.”
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