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Singapore Airlines Q2 net profit up 78%

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SINGAPORE, Nov 12, AFP

November 13 2013, 07:12AM

Singapore Airlines (SIA) says its net profit in the second quarter is up 78 per cent year-on-year but warns that intense competition and a strong local dollar will put pressure on yields.

Net profit for the three months ended September was $Sg160 million ($A137.69 million) on revenue of $Sg3.90 billion, the airline said in a statement.

It said the rise was "mainly attributable to the higher operating profit, share of profits from associated companies and gains from the sale of aircraft".

However, it cautioned that "the operating landscape for the airline industry remains challenging amid continued global economic uncertainty".

While advance bookings for the coming months are likely to be higher than the year before, "ongoing promotional activities necessitated by intense competition and a strong Singapore dollar are expected to place pressure on yields," SIA added on Tuesday.

Its cargo arm SIA Cargo reported a narrower operating loss of $Sg31 million from $Sg50 million in the same period last year, but said the freight business remains subdued.

"Cargo demand is expected to remain flat due to weak international trade volumes and excess capacity in the market," SIA said.

SIA is facing stiff competition from Middle Eastern and other Asian carriers as well as from budget airlines which have grown in number in Asia.

The airline reported a net profit in the year ending March of $Sg379 million, up 12.8 per cent, boosted by the sale of aircraft, spares and spare engines.