Nov. 10 (Bloomberg) -- Singapore Airlines Ltd. posted its first back-to-back quarterly loss in at least seven years after the global recession caused a slump in passenger numbers.

The world’s largest carrier by market value had a net loss of S$159 million ($114 million) in the three months ended in September, compared with a net income of S$324 million, a year earlier, it said in a statement today.

Singapore Air said yields were unlikely to return to pre- recession levels within the next six months even as the worst of the air-travel slump eases. Chief Executive Officer Chew Choon Seng has taken a pay cut, reduced work days and drawn up plans to remove 11 percent of capacity as the carrier tries to avoid its first annual loss in two decades.

“The worst may be over but we’re not expecting a rapid recovery,” said Louis Wong, who manages $50 million at Phillip Securities HK Ltd. “There seems to be some stabilization in demand but a lot of that has to do with the promotions that the airline is offering. That will eat into their profit margins.”

Singapore Air closed little changed at S$14.26 in trading in the city-state today. Earnings were released after the market closed. Of the 21 analysts tracked by Bloomberg in the past 12 months, seven recommend that investors sell the stock, eight have “buy” ratings, while the remainder have “hold” calls.

British Airways, JAL

British Airways Plc, Europe’s third-largest airline, said Nov. 6 it had a record first-half loss. Japan Airlines Corp., Asia’s largest carrier by sales, reported a 30-fold surge in its first-quarter loss, forcing it to seek a government bailout.

“Advance bookings indicate that demand for air travel has stopped declining and is gradually recovering,” the carrier said in a statement today. “Yields are unlikely to get back to pre-crisis levels within the next six months.”

Singapore Air’s operating loss, or sales minus the cost of goods sold and selling, general and administrative expenses, was S$181.4 million in the three months to September.

The airline said in July it may post its first annual loss since listing shares in 1985 due to the recession. It may report a full-year profit of S$37 million in the year ending in March, the worst since the company went public, according to the median estimate in a Bloomberg survey of 13 analysts.

“Big Worry”

Air-passenger travel climbed for the first time in a year in September, with average ticket prices still below year- earlier levels, the International Air Transport Association, or IATA, said last month. The trade group estimates that global airlines will lose a total of $11 billion this year, with carriers in Asia Pacific accounting for a third of that.

Passenger yield, or the average price a traveler pays to fly one kilometer, dropped to 9.8 cents from 12.8 cents a year earlier, Singapore Air said today.

“Yields are still going to be a big worry,” said Rohan Suppiah, an analyst at Kim Eng Securities Pte in Singapore, who has a “buy” rating for the stock. “A sustained recovery in demand may not happen until the second half of next year.”

Singapore Air filled an average 79.6 percent of available seats in the quarter, compared with 79.1 percent a year earlier and an average of 88.8 percent the carrier needs to break even. It flew 4.19 million passengers in the quarter, compared with 4.85 million a year before.

Spending on jet fuel, the carrier’s biggest expenditure, fell 41 percent to S$1.14 billion in the quarter. Jet kerosene prices in Singapore averaged $74.98 a barrel in the three months ended September, 47 percent less than a year earlier, according to Bloomberg data.

Singapore Air said it made a loss on fuel hedging of S$198.4 million in the period. The airline has hedged 20 percent of its jet fuel requirement, or 3.5 million barrels, at an average of $100 a barrel for the October to March period, it said in a statement today.

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

Last Updated: November 10, 2009 05:42 EST