SINGAPORE: Singapore Airlines Ltd (SIA) reported a near doubling of its third-quarter operating profit, helped by lower fuel costs, but said intense competition in Southeast Asia will put pressure on its performance.
The carrier, a benchmark for Asia's full-service airline industry, said on Thursday that it expects the challenging operating environment to persist. "On the competitive front, expansion of other full-service airlines as well as low-cost carriers, particularly in Southeast Asia, will continue to exert pressure on loads and yields," it said in a statement.
The airline, 56 percent owned by sovereign investor Temasek Holdings, reported an operating profit of S$288 million ($205 million), up 96 percent from a year ago, while net profit rose 35.5 percent to S$275 million.
SIA's business model hinges on using its hub at Singapore's Changi Airport to connect passengers within Asia and to Europe, Australia and the United States.
It also has a presence in the low-cost segment through Tiger Airways and Scoot.
"While more relief could arise from lower fuel prices, which have declined to a 12-year low, fuel continues to make up a significant portion of the Group's expenditure, with 46.6 percent of the Group's fuel requirement in the fourth quarter hedged at a weighted average price of $90 per barrel," SIA said.
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