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UPDATE 1-Singapore Airlines' second-quarter profit nearly triples
November 7, 2017 / 11:28 AM / 17 days ago

UPDATE 1-Singapore Airlines' second-quarter profit nearly triples

(Adds details, background)

SINGAPORE, Nov 7 (Reuters) - Singapore Airlines said its second-quarter net profit nearly tripled on the back of stronger operating results, helped by a rebounding cargo business, but yields remained under pressure as competitors increased capacity.

The carrier, a benchmark for Asia’s premium airlines, earned S$190 million ($139 million) in the three months to Sept. 30, up from S$65 million a year before, it said on Tuesday.

“Headwinds remain as competitors mount significant capacity in key markets. Yields continue to be under pressure, despite some stabilisation in recent months,” the airline said.

The airline and Hong Kong-based rival Cathay Pacific Airways Ltd have been struggling against mounting global competition from Chinese and Middle Eastern rivals and low-cost carriers, with no domestic flights to underpin their earnings.

Passengers travelling with Singapore Airlines increased by 2.3 percent in the second quarter and the carrier’s second-quarter operating profit rose to S$232 million, from S$109 million a year earlier.

Singapore Airlines itself contributed S$170 million to group operating profit in the quarter, up from S$79 million a year earlier, while the SilkAir unit’s operating profit fell 17.6 percent to S$14 million, and that of low-cost subsidiary Scoot’s declined by 75 percent to S$2 million.

The cargo division reported an operating profit of S$26 million, rebounding from an operating loss of S$11 million a year ago amid a strong recovery in the freight market globally.

Singapore Airlines is undertaking a three-year transformation plan designed to make its business more competitive after reporting a surprise fourth-quarter loss in May.

Last week it said it would spend $850 million to increase the overall seat count by up to a quarter in its fleet of A380 superjumbos and halve the number of first class seats to combat lower airfares and boost competitiveness.

The company’s management team will hold a detailed briefing for investors and media on Wednesday.

$1 = 1.3644 Singapore dollars Reporting by Jamie Freed and Masayuki Kitano; Editing by Sunil Nair and Susan Fenton

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