SINGAPORE (XFN-ASIA) - Singapore Airlines said its second quarter to September net profit fell 14.6 pct year-on-year to 293.2 mln sgd as higher fuel costs offset improvements in passenger and cargo traffic.
The net profit was below the 300-383 mln sgd net profit forecast by analysts polled by XFN-Asia.
The airline said the group's revenue improved 7.7 pct year-on-year to 3.61 bln sgd , aided by a 5.9 pct rise in passenger traffic and 2.9 pct increase in average yields.
However, the improvement was muted by higher jet fuel prices, it said.
SIA said its fuel expenses rose 31.9 pct year-on-year to 2.56 bln in the first half to September as average jet fuel prices rose to 90 usd per barrel from 74 usd a year ago. The airline did not given details of their fuel expenses in the second quarter.
'Looking ahead, demand for air travel is expected to remain buoyant, supported by favorable conditions in the Asian and European economies,' SIA said in a statement.
'However, the price of jet fuel is still volatile and remains high. Geopolitical uncertainties could drive prices up again in coming months,' it added.
SIA said that the airline hopes to continue with its capacity expansion plans regardless of the delayed deliveries of the Airbus A380 aircraft.
'Work is in progress on contingency plans to mitigate the impact of these delays on forward capacity growth,' it said.
In a briefing, SIA chief executive officer Chew Choon Seng said the airline hopes to get its first Airbus A380 by Oct 2007.
Chew declined to say how much compensation they expect from Airbus as discussions are still ongoing.
Asked about potential divestments of units SIA Engineering and Singapore Airport Terminal Services, Chew said: 'The board still keeps it under regular review. At this juncture, they deem it better in shareholders' interest to keep these two companies.'
(1 usd = 1.56 sgd)
yuinmunn.szetoh@xfn.com
© 2006 AFX News
