Singapore Airlines to boost capacity

Singapore: Singapore Airlines, the world's second-largest carrier by market value, said it would increase capacity 5 per cent in the fiscal second half as business travellers and holidaymakers reserve more flights.

"Advance bookings for the coming months indicate that demand is holding up," the carrier said in the statement yesterday. The airline also reported second-quarter profit of S$380 million (Dh1 billion), surpassing analysts' estimates.

The carrier has added flights to cities including Los Angeles, Tokyo and Seoul as global air travel recovers from the worst drop since the Second World War.

Cathay Pacific Airways has also said it plans to return capacity to pre-crisis level, while Tokyo-based All Nippon Airways is boosting overseas flights 15 per cent in the year ending March.

"Singapore Air will continue to benefit from a global recovery and an increase in demand for leisure and business travel in the medium-to-long term," said Steven Lim, who manages about $200 million at Daiwa SB Investments in Singapore.

"The recovery in premium travel is still intact."

The carrier's capacity in the fiscal first half ended September was little changed from a year earlier.

Airlines slashed flights last year as travel plunged during the global recession.

Asian airlines have so far limited capacity increases amid rising demand to preserve margins.

Regional passenger numbers jumped 15 percent in the nine months ended September, while capacity rose 3.3 per cent, according to the Association of Asia Pacific Airlines, which represents 15 carriers including Singapore Air, Cathay Pacific and All Nippon.

Singapore Air's passenger numbers were little changed at 4.17 million in the three months ended September, according to the statement. The carrier filled 80.3 per cent of seats in the quarter, compared with 79.6 per cent a year earlier.

Passenger yield, or the average price a traveller pays to fly one kilometre, increased to 11.8 Singapore cents from 9.8 cents a year earlier.

The carrier expects yields to be "steady".

Second-quarter revenue rose 18 per cent to S$3.6 billion. Net income in the period surpassed the S$366 million average of seven analyst estimates compiled by Bloomberg. A year earlier, the airline had a loss of S$159 million.

The carrier gained 0.9 per cent to S$16.32 at the close of yesterday's trading.

The results were released after the market closed. Of the 23 analysts tracked by Bloomberg data in the past 12 months, 20 have a "buy" rating, two recommended that investors hold the stock, while one says "sell."

The company is proposing to pay an interim dividend of 20 Singapore cents per share, according to the statement.

Services resume

Singapore Air has resumed all services on its Airbus A380 after conducting "precautionary technical checks" recommended by Rolls-Royce Group and the planemaker following a Qantas Airways engine blowout last Thursday. Singapore Air, the first to fly the double-decker plane, has 11 Airbus A380s.

Airlines in the Asia Pacific will probably post a combined profit of $5.2 billion this year, more than double an earlier forecast of $2.2 billion, the International Air Transport Association said in September.