SINGAPORE (Reuters) - Singapore Airlines Ltd., the world's second-largest carrier by market capitalization, swung to a net profit for three months ended June from a surprise loss in the previous quarter, but warned of a weak outlook for its cargo business.
The Singapore flagship carrier earned S$78 million ($62 million) in the fiscal first quarter ended June, up from S$45 million a year earlier. Analysts polled by Reuters News before the results had expected SIA to turn in a net profit of around S$70 million.
SIA posted a net loss of S$38.2 million in the January-to-March quarter due to weak demand and high jet fuel prices.
SIA faces increased competition from Middle Eastern carriers on long-haul routes connecting Europe and North America to Asia, pushing down yields on business class seats. SIA, which has clung to its premium image, has also been losing market share to low-cost carriers on regional routes.
"In this difficult environment, the group will maintain its vigilance in cost control and remain nimble in deploying capacity to meet market demand. The group is well positioned to weather the challenges with its strong balance sheet," SIA said in a statement on Wednesday.
But Singapore's flagship carrier warned that forward indicators for air freight signal a weak outlook for the cargo business, with the unit facing pressure in terms of demand and yields.