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Signs of recovery at Singapore Airlines

Singapore Airlines – the second largest carrier in the world by market capitalisation – has seen its 2010 profits recover from low 2009 levels but has warned of challenges in the coming year.

In total the airline made £540 million before tax in the year to the end of March 31st, an increase of £434 million on the previous year.

Announcing the results, Singapore Airlines pledged to pay S$1.20 a share in special and final dividends.

As a result, the airline climbed 2.8 per cent to S$14.66, the biggest gain since April 13th.

Group revenue grew 14 per cent over the financial year, reaching a total of £7.2 billion.

The airline recorded an increase in passenger numbers, even when disruptions - including the Icelandic ash cloud, snowstorms in Europe and USA, floods in Australia and earthquakes in New Zealand and Japan – were accounted for.

Singapore Airlines also overcame a 26 per cent increase in the cost of fuel, largely though hedging.

However, fuel prices still posed a problem looking forward.

“While there has been some respite in the past week, jet fuel prices are likely to remain high and volatile in the near term,” read a statement from Singapore Airlines. 

“The twin challenges of near term weakness in load factors and high fuel prices will adversely affect operating performance of airlines.”

Last year Singapore Airlines was recognnised as the offering the World’s Leading Airline Inflight Entertainment by the prestigious World Travel Awards.