SINGAPORE: Singapore Airlines (SIA) on Thursday (Jul 28) said its group net profit for the first quarter nearly tripled from the previous year due to lower fuel prices and divestment gains.
Net profit for the three months to June came in at S$257 million (US$190 million), up 182 per cent from S$91.2 million in the same period last year, the airline said in a statement.
On top of an improved operational performance, the group brought in S$142 million by selling off a 10 per cent stake in Hong Kong Aero Engine Services Ltd.
SIA said operating costs were down by S$161 million to S$3.4 billion this year, due to a 28 per cent fall in fuel prices.
Global oil prices have fallen sharply over the past two years due to oversupply and weak demand, standing at less than half their mid-2014 levels.
But SIA said its first-quarter gains were partially offset by losses from Virgin Australia, of which its a stakeholder. Cargo revenue was also down S$60 million, or 11.6 per cent.
"The cargo market remains soft, with economic uncertainty in Europe and China. Cargo yields are likely to remain under pressure as overcapacity persists in the industry," the airline said.
The year ahead remains "challenging" because of weak economic outlook and geopolitical concerns, it added. "Competition remains intense with aggressive capacity injection, and yields will continue to remain under pressure," said SIA.