SINGAPORE, May 14 (Reuters) - Singapore Airlines Ltd (SIA) on Thursday reported a full-year fuel hedging loss of S$549 million ($416 million) as a result of falling oil prices and also highlighted fierce competition and soft demand on its key routes.
Singapore’s flag carrier reported a 58 percent rise in operating profit to S$409.4 million in the year ending March, supported by lower fuel costs.
“Market conditions remain challenging amid an uncertain global economic outlook. Demand in key markets is soft, primarily on Americas and European routes,” SIA said in a statement
Since Goh Choon Phong became the airline’s chief executive in 2011, the group has been diversifying away from its mainstay full-service business. It has launched long-haul low-cost carrier Scoot, as well as Vistara, an Indian full-service airline with conglomerate Tata Sons, and taken a majority stake in budget carrier Tiger Airways Holdings.
Singapore Airlines, 56 percent owned by sovereign investor Temasek Holdings, swung to an operating profit of S$91.9 million for January-March from an operating loss of S$60.3 million a year ago.
For this year, the company said it is 40.9 percent hedged in Singapore Jet Kerosene and 4 percent hedged in Brent at weighted average prices of $106 per barrel and $102 per barrel, respectively. ($1 = 1.3181 Singapore dollars) (Reporting by Anshuman Daga. Editing by Jane Merriman)