SINGAPORE - Singapore Airlines (SIA) said Wednesday its first quarter net profit more than doubled from a year earlier as fuel expenses fell due to lower oil prices.
Net profit for the three months to June came in at $91.2 million, up 162 percent from Sg$34.8 million in the same period last year, the airline said in a filing to the Singapore Exchange.
Revenue rose 1.4 percent to $3.73 billion, but the carrier warned of challenges ahead due to tougher competition.
Fuel costs, which account for more than a third of expenses, fell 8.8 percent, but the savings were partially offset by hedging losses and a strong US dollar against the local currency.
SIA said 58.5 percent of its fuel needs in the quarter were hedged at a weighted average price of $110 per barrel.
World oil prices have declined sharply due to a global crude oversupply.
SIA said advance passenger bookings for the July-September quarter are higher year-on-year, but noted that "there is weaker demand for (the) Americas and Europe regions, reflecting the competitive environment".
It said yields were expected to remain under pressure due to more intense competition on long-haul routes.
The airline said it would continue to upgrade its products for the rest of the financial year, including offering a new premium economy class in August.
"Air cargo yields are unlikely to see an upturn as industry overcapacity persists," SIA said.
The airline in May reported that its full year to March net profit jumped 2.34 percent to $367.9 million.
SIA shares rose 0.53 percent to $11.42 on Wednesday before the earnings results were released.
The airline currently has a fleet of 105 passenger planes, including 19 Airbus A380 superjumbos.