Singapore Airlines believes in the continued recovery
- on 07.26.10
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Singapore Airlines, world's second largest airline by market value, said that the resumption of passenger and freight is expected to continue in the near future, having reported earnings above expectations for the first quarter.
The group reported a net profit of 253 million Singapore dollars (143 million euros) for the quarter April to June, higher than analysts' forecasts of 232 million Singapore dollars.Over the same period last year, the company had posted a loss of 307 million Singapore dollars, its first quarterly loss in six years.
Singapore Airlines and displays its largest quarterly profit since the period October to December 2009, where she had posted a net profit of 404 million Singapore dollars.
Airlines resumed after the worst recession experienced by the sector, but some analysts question whether this rebound can be sustained, the debt crisis threatening the European demand for long-haul flights.
"The book shows that the recovery from one year to another passenger and returns, clearly visible in the second quarter of the year, should continue until the end of 2010," said the company.
"Similarly, key (…) suggest that the recent resurgence of air cargo is expected to continue in the near future, although the growth rate should decline.
BUSINESS RESUMPTION
The International Air Transport Association (IATA) estimated in early June that airlines emerge from accumulated profit of 2.5 billion dollars (2.1 billion euros) this year, a dramatic turnaround since anticipated in March losses of 2.8 billion.
The recovery was briefly questioned by the disruption caused by the cloud of volcanic ash from Iceland. This episode has cost 50 million Singapore Airlines Singapore dollars.
"Despite the negative effects on short-term generated by the Icelandic volcano, I think it's off again very hard to Singapore Airlines," said Sukhor Yusof, an analyst at Standard & Poors.
"An increase of 15% yield (passenger) is considered relevant given that they have not increased their capacity or their fleet outside of scheduled deliveries," he adds.
For the analyst, the cost of fuel and the stability of the European demand should be the main factors monitored by investors by the end of the year.