Singapore Airlines Ltd., Southeast Asia’s largest carrier by market value, said first-quarter profit more than doubled after lower oil prices helped it cut expenses.
Net income rose to S$91.2 million ($66.8 million) in the three months ended June, from S$34.8 million a year earlier, the airline said in a statement to the Singapore stock exchange Wednesday. Sales grew 1.4 percent to S$3.73 billion.
Chief Executive Officer Goh Choon Phong has ordered new planes, is adding premium economy class seats and has formed ventures from Australia to India as competition with budget airlines and the Middle East carriers increases. The carrier, known for its “Singapore Girl” advertising campaigns, warned that market conditions remain challenging.
Singapore Air shares rose 0.5 percent to close at S$11.42 before the earnings announcement. Seven of 18 analysts recommend investors buy the stock, according to data compiled by Bloomberg. Ten say hold and one has a sell rating.
Passenger yield, or money earned from carrying travelers one kilometer, fell to 10.7 Singapore cents from 10.9 Singapore cents a year earlier, due to added capacity and aggressive fare competition, the airline said. Cargo yield fell to 30.5 Singapore cents from 33 Singapore cents.
The airline said savings from lower fuel prices were partially offset by hedging losses and a stronger U.S. dollar. Nearly 60 percent of the group’s fuel needs in the quarter were hedged at a weighted average price of $110 per barrel.
Singapore Air is also enhancing cooperation between its two budget airline subsidiaries. Members of Singapore Air’s mileage program, KrisFlyer, will be able to redeem their points for vouchers to be used on flights on its low-fare subsidiaries Scoot and Tiger Air starting in April.