Singapore Airlines say the group returned to profitability in the third quarter of the financial year with a net profit attributable to equity holders of $404 million. This was a turnaround from losses of $307 million in the first quarter and $159 million in the second quarter.

Group revenue at $3,418 million was $336 million (+10.9%) higher than the second quarter.

On the cost side, SIA said group expenditure fell $169 million (-5.2%) from the preceding quarter. The increase in jet fuel price led to a $34 million rise in fuel cost before hedging. However, hedging losses were $146 million lower. Savings in other areas, such as payroll costs, contributed a further $57 million.

As a result, group operating profit for the quarter ended December 2009 was $323 million, in contrast to the operating loss of $182 million in the previous quarter.

The parent airline company recorded an operating profit of $231 million in the third quarter, against an operating loss of $157 million in the previous quarter, from a combination of higher revenue (+$335 million or +13.7%) on continued recovery in load factors and yields, and lower losses from fuel hedging (–$120 million).

All the main companies in the group were profitable in the quarter:

Singapore Airlines
Operating profit of $231 million (profit of $314 million in 2008)

SIA Cargo
Operating profit of $40 million (loss of $46 million in 2008)

SilkAir
Operating profit of $23 million (profit of $12 million in 2008)

SIA Engineering
Operating profit of $22 million (profit of $29 million in 2008)

Including to equity holders for the third quarter of $404 million is $67 million higher than the same quarter last year. With this result, the net loss attributable to equity holders for the nine-month period of the financial year has narrowed to $62 million, from the $466 million loss recorded in the first half.

SIA says the company decommissioned one B747-400 and one B777 during the quarter. As at Dec 31 2009, the operating fleet comprised 107 passenger aircraft — eight B747-400s, seventy-six B777s, ten A380-800s, eight A330-300s and five A340- 500s — with an average age of six years and three months.

The company says it will continue to adjust capacity to match demand. During the quarter, there were increased frequencies to Auckland, Christchurch, Brisbane, Perth, Manchester, Rome and Houston (via Moscow), and since Jan 19, the non-stop all-Business Class service to Newark has returned to daily operations. On the other hand, flights to Athens and Dubai were reduced during the quarter, and services to Pakistan and Nanjing will be suspended with effect from Feb and March, respectively.

From late March, Munich will be added to the SIA network, and the A380 will be deployed to Zurich.

SIA says passenger loadings in January and bookings in hand indicate that the recovery in the third quarter is likely to continue in the final quarter of the current financial year. The improvement in yields is also holding up. Although air cargo shows similar improvement, it is more tentative because of the excess of freighter capacity and the unidirectional nature of cargo flows.

The business outlook for the group in 2010 is encouraging but it must be acknowledged that uncertainties linger over the global economy.