SQ Q2 profit down 36% on high fuel

[Naim 6]

Singapore Airlines Q2 net down 36 pct on high fuel

Thu Nov 6, 2008 4:25am EST

 

SINGAPORE, Nov 6 (Reuters) - Singapore Airlines (SIAL.SI: Quote, Profile, Research, Stock Buzz), the world's largest airline by market value, on Thursday posted a 36 percent fall in quarterly profit, dragged down by record jet fuel prices and slowing travel demand.

 

Singapore Air, whose market value of $9.9 billion tops U.S.-based budget carrier Southwest Airlines (LUV.N: Quote, Profile, Research, Stock Buzz) and Japan's All Nippon Airways (9202.T: Quote, Profile, Research, Stock Buzz), said July-September net profit was S$324 million ($218.6 million) compared with S$508 million a year ago.

 

The second quarter results were better than the S$297 million estimate of four analysts polled by Reuters.

 

Revenues for the airline, which derives about half of its sales from first-class and business travellers, were S$4.4 billion compared with S$3.97 billion a year ago.

 

Singapore Air has seen declining passenger demand this year as the global economic slowdown crimps corporate and leisure travel, forcing it last week to announce a cut in flights from the city-state to other Asian cities. [iD:nSIN322047]

 

But the airline has seen some relief on the cost side as jet fuel traded in Singapore JET-SIN plunged 52 percent to $87 per barrel from July's peak in line with a slide in crude oil CLc1, allowing the company to cut fuel surcharges this week.

 

Singapore Air shares closed down 7.2 percent on Thursday before it released its results.

 

Its shares are down around 29 percent since the start of the year, outperforming the benchmark Straits Times index's .FTSTI 46 percent fall and regional rivals Cathay Pacific (0293.HK: Quote, Profile, Research, Stock Buzz), down 54 percent, and Qantas (QAN.AX: Quote, Profile, Research, Stock Buzz) which has lost 47 percent.

 

(Reporting by Daryl Loo, editing by Dhara Ranasinghe)

 

http://www.reuters.com/article/marketsNews...C00090020081106