Singapore Airlines group saw its 2010 profits recover from the global economic crisis of 2009 but has warned of challenges in the coming year.
The group made £540.5m before tax in the year to the end of March, an increase of £434m on the previous year.
Group revenue grew 14% to £7.2 billion due to the recovery in yields and passenger numbers. The increase came despite disruptions including the Icelandic ash cloud, snowstorms in Europe and USA, floods in Australia and earthquakes in New Zealand and Japan.
The result also came despite a 26% increase in fuel costs, however this was partially offset by better fuel hedging. Last year, losses from hedging totalled only £30m, compared to £276.5m in 2009. This led to a doubling of operating profit to £629m.
Singapore Airlines will remove the last of its Boeing 747s from its fleet by March and take delivery of eight Airbus A380s, making a total of 19. The changes will mean the airline has 104 aircraft, four fewer than this year. However, capacity will grow 6% due to the further A380s.
The carrier said it expected the year ahead “to be challenging for the airline industry”.
It added that concerns over radiation leaks in Japan continued to affect traffic there but that fuel prices were the biggest worry.
“While there has been some respite in the past week, jet fuel prices are likely to remain high and volatile in the near term,” it said.
“The twin challenges of near term weakness in load factors and high fuel prices will adversely affect operating performance of airlines,” it added.