Singapore Airlines (SIA) posted its largest quarterly profit in two years as jet-fuel hedging gains masked a drop in yields from carrying passengers and freight. Profit from hedging jet kerosene tripled in the quarter, helping Singapore Air’s group net profit jump 78 per cent from a year earlier to S$160 million (US$128 million), the carrier said. Group revenue grew $107 million (+2.8 per cent) to $3.9 billion on the back of five per cent growth in passenger carriage, although passenger yield declined 3.5 per cent.
Cargo revenue was lower as the uncertain global economic situation and excess capacity pushed both loads and yields down by 7.2 and 1.8 per cent respectively. However, SIA Cargo’s operating loss for the second quarter narrowed by $19 million to $31 million, on the back of continued efforts to better match capacity to demand. SIA Cargo as at mid-December operates a fleet of nine B747-400 freighters after parking four in Victorville, California with a fifth expected to be parked in early 2014. All of the parked aircraft are to be sold.
Looking ahead SIA said: “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.”