May 11 (Bloomberg) -- Singapore Airlines Ltd., the world's largest carrier by market value, said fourth-quarter profit more than doubled as an expansion of its fleet and Asia's economic growth boosted passenger numbers.

Net income climbed to S$671.3 million ($442 million) in the quarter ended March, from S$266.3 million a year earlier, the company said in a release to the Singapore stock exchange. The profit, the highest in at least four years was above the S$549 million median estimate in a Bloomberg New survey of six analysts. Revenue increased 8.6 percent to S$3.67 billion from S$3.38 billion, the company said.

Singapore Airlines carried 7.5 percent more passengers in the period as nine new Boeing Co. 777s helped it cope with a 19- month delay in the delivery of its first Airbus SAS A380. The carrier is expanding its fleet to tap travel demand in Asia that is likely grow quicker than the global average.

``The business climate in Asia is very good and tourism is driving traffic flow,'' said Thue Isen, who manages $1 billion in Asian equities at Bankinvest Group in Singapore. ``Singapore Air is a beneficiary of this.''

The stock rose 1.1 percent in Singapore to close at S$18.5 before the earnings announcement. Shares of the carrier, 57 percent owned by Singapore's state-owned investment company Temasek Holdings Pte, have gained 5.7 percent this year, giving it a market value of S$23.1 billion. Air France-KLM Group and Air China Ltd. are the second and third largest airlines by market value.

One-Time Gain

The airline booked a one-time gain of S$247 million as it cut its provisions for tax payments following a reduction in Singapore's corporate tax rate to 18 percent from 20 percent.

``Demand for air travel remains strong across global markets,'' the company said in the statement. ``The key challenges being faced this year are limited capacity growth arising from delays in the delivery of the A380.'' The airline said the price of aviation fuel and uncertainty over the U.S. economy were also risk factors.

Singapore Airlines carried a record 18.35 million passengers last year, a 7.9 percent increase from a year earlier, according to the statement.

Business Travel

Economic growth and rising incomes are encouraging more people in Asia to travel for business and leisure. International Asia-Pacific passenger traffic is estimated to grow 5.7 percent a year between 2006 and 2010, outpacing the global average, according to estimates by the International Air Transport Association, which represents more than 250 carriers worldwide.

``Premium traffic was the star performer in 2006 -- especially on long-haul routes,'' Merrill Lynch & Co. analysts Paul Dewberry and Ying Ying Hou wrote in an April 17 report. ``We expect another year of strong growth in this segment in 2007.''

Full-year net income climbed to a record S$2.12 billion, from S$1.24 billion, a year earlier, the company said in the statement. Profit was above the S$2 billion median estimate in a Bloomberg New survey of six analysts. Sales rose 9 percent to S$14.5 billion S$13.34 billion.

The airline will pay a final dividend of 35 cents a share and a special dividend of 50 cents a share. The special dividend will cost S$625 million. The airline will also cancel one share for every 15 shares outstanding and pay S$18.46 for each cancelled share. The measure will cut the share capital by 6.7 percent and increase earnings per share and return on equity.

A380

Singapore Airlines, set to be the first to fly the A380, has ordered 19 of the 555-seat planes. The airline was originally due to receive its first A380 in March of last year. Airbus, based in Toulouse, France, pushed back deliveries of the double-decker planes because of problems related to the installation of wiring systems.

The delays have forced carriers, including Emirates Airline, the biggest customer for the A380, to lease other planes as stopgap replacements. Singapore Airlines was able to use nine 777-300ERs it received between November and March to mitigate

The airline will receive its first A380 in October and introduce it into commercial service soon thereafter, the statement said.

``The use of A380 will grow capacity on high demand routes,'' the statement said.

The airline said it received S$421 million from the sale of a building last year. It plans a capital expenditure of S$4.8 billion over the next five years, the carrier said at the press conference.

SIA Engineering Co., the airline's aircraft maintenance arm, had a profit of S$48.4 million in the quarter ended March, Full year profit was S$102 million, a decline of 24 percent.

Profit at Singapore Airport Terminal Services Ltd., its ground handling unit, fell 17 percent to S$153 million last year and the cargo unit had a loss of S$32 million, it said.

To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net

Last Updated: May 11, 2007 07:07 EDT