SINGAPORE: Singapore Airlines (SIA), the world's most valuable carrier, posted a 72% rise in annual profit, beating market expectations, as the airline booked large one-off gains.
Full-year profit rose to S$2.13bil from S$1.24bil in the previous year, beating an average forecast of S$1.85bil from 15 analysts polled by Reuters Estimates.
The annual profit was boosted by a S$421mil gain from the sale of a 35.5% stake in Singapore Aircraft Leasing Enterprise (SALE) to Bank of China in December as well as proceeds from a property divestment.
SIA warned investors in February that sales growth would be limited by a capacity shortfall due to delivery delays for the new Airbus A380 superjumbo, now due to arrive in October. The airline will be the first to fly the aircraft commercially.
The price of jet fuel, the single biggest cost item for airlines, has climbed 10% but is still 22% below a record high of US$93.20 a barrel set in August last year.
SIA, the city-state's only global brand, is among the world's most profitable airlines thanks to its focus on cost and efficiency. In January, the carrier said it would outsource some of its call-centre operations in Australia and North America.
The airline is also in cooperation talks with loss-making China Eastern Airlines, with Chinese state media reporting that this could include buying a stake in the smallest of China's three main carriers.
Analysts say SIA, which focuses on business travellers, faces a static home market with the days of big traffic growth behind it and could benefit greatly from getting a foothold in China's commercial capital Shanghai as demand for air travel rises in Asia's second largest economy. – Reuters