Singapore Airlines Q3 profit falls 27% but demand grows

Singapore Airlines on Thursday reported a 27% fall in Q3 net profit but beat expectations as revenue growth helped offset higher fuel costs. The airline is in the second year of a three-year transformation plan designed to cut costs and boost revenue to better compete against Chinese, Middle Eastern and low-cost rivals. It said forward bookings were tracking in line with its capacity growth but warned uncertainties surrounding US-China trade tariffs and Brexit were clouding the overall demand outlook for passengers and cargo. SIA made S$284m ($209m) in the three months ended Dec. 31, down from S$389 million a year-earlier, which was restated to reflect accounting changes. That beat the S$240.2m expected by three analysts in estimates obtained by Reuters and Refinitiv. Group revenues rose 7% to S$4.34b in Q3, despite flat average ticket prices as the airline filled a higher percentage of seats and increased capacity by 5%. During the quarter, the airline began a significant expansion of capacity to the US, resuming non-stop flights to New York and Los Angeles after a five-year hiatus. Jet fuel prices fell sharply during the December quarter but the airline said it paid 22.2% more on average than a year earlier. The carrier has hedged 80% of its fuel for Q4 at an average price of $74 a barrel.<br/>