Singapore Airlines., the world’s second-largest carrier by market value, said it would increase capacity 5% in the fiscal second half as business travelers and holidaymakers reserve more flights.

 

“Advance bookings for the coming months indicate that demand is holding up,” the carrier said in the statement today. The airline also reported second-quarter profit of $380 million, surpassing analysts’ estimates.

 

The carrier has added flights to cities including Los Angeles, Tokyo and Seoul as global air travel recovers from the worst drop since World War II. Cathay Pacific Airways has also said it plans to return capacity to pre-crisis level, while Tokyo-based All Nippon Airways Co. is boosting overseas flights 15% in the year ending March.

 

“Singapore Air will continue to benefit from a global recovery and an increase in demand for leisure and business travel in the medium-to-long term,” said Steven Lim, who manages about US$200 million ($256.8 million) at Daiwa SB Investments in Singapore. “The recovery in premium travel is still intact.”

 

The carrier’s capacity in the fiscal first half ended September was little changed from a year earlier. Airlines slashed flights last year as travel plunged during the global recession.

 

Asian airlines have so far limited capacity increases amid rising demand to preserve margins. Regional passenger numbers jumped 15% in the nine months ended September, while capacity rose 3.3%, according to the Association of Asia Pacific Airlines, which represents 15 carriers including Singapore Air, Cathay Pacific and All Nippon.

 

Singapore Air’s passenger numbers were little changed at 4.17 million in the three months ended September, according to the statement. The carrier filled 80.3% of seats in the quarter, compared with 79.6% a year earlier.

 

Passenger yield, or the average price a traveler pays to fly one kilometer, increased to 11.8 cents from 9.8 cents a year earlier. The carrier expects yields to be “steady.”

 

Second-quarter revenue rose 18% to $3.6 billion. Net income in the period surpassed the $366 million average of seven analyst estimates compiled by Bloomberg. A year earlier, the airline had a loss of $159 million.

 

The carrier gained 0.9% to $16.32 at the close of trading today. The results were released after the market closed. Of the 23 analysts tracked by Bloomberg data in the past 12 months, 20 have a “buy” rating, two recommended that investors hold the stock, while one says “sell.”

The company is proposing to pay an interim dividend of 20 cents per share, according to the statement.

 

Singapore Air has resumed all services on its Airbus SAS A380 after conducting “precautionary technical checks” recommended by Rolls-Royce Group Plc and the planemaker following a Qantas Airways engine blowout on Nov. 4. Singapore Air, the first to fly the double-decker plane, has 11 Airbus A380s.

 

Airlines in the Asia Pacific will probably post a combined profit of US$5.2 billion this year, more than double an earlier forecast of US$2.2 billion, the International Air Transport Association said in September.