SINGAPORE, July 28 Singapore Airlines (SIA)
, the world's second-largest airline by market value,
reported an 82 percent fall in first-quarter net profit, worse
than analyst forecasts, as soaring jet fuel prices hit its
The carrier, about 55 percent-owned by Singapore state
investor Temasek Holdings , posted a net profit of
S$44.7 million ($37 million) in the quarter ended June 30,
compared to S$252.5 million a year ago. Four analysts
polled by Reuters had on average forecast the figure at S$165.6
"The prevailing price of jet fuel of above $130 per barrel
is close to 50 percent higher year-on-year. At these levels,
fuel cost now constitutes more than 40 percent of the group's
total expenditure," SIA said in a statement.
"Advance bookings for travel in the next few months are
almost flat compared to the same period last year. With the
current economic uncertainties, significant challenges remain in
the key markets of Europe and the United States."
The world's airlines recovered last year from their worst
ever downturn following the global economic crisis, but are now
being hit by high jet fuel prices that are eroding margins.
The International Air Transport Association (IATA) has cut
its industry profit forecast for 2011 by more than half to $4
billion as high oil prices and turmoil in Japan, North Africa
and the Middle East weigh on the industry's recovery.
The IATA $4 billion profit forecast compares with an $8.6
billion forecast on March 2, just before the Japan earthquake
and tsunami triggered a crisis at a nuclear power station. Since
then, the Arab uprisings have spread and oil has remained above
$100 a barrel.
SIA shares have declined by nearly 4 percent since
the start of the year while the overall Singapore market has
been largely flat.
($1 = 1.204 Singapore Dollars)
(Reporting by Harry Suhartono; Editing by Matt Driskill)