Singapore Airlines (SIA) said its third quarter net profit surged 36% from the previous year, thanks largely to lower fuel expenses. 
Oil prices plunged to 12-year lows in January and analysts say they will remain depressed at least for the rest of 2016 due to a supply glut and weak demand. 
Proceeds from the sale and leaseback of some aircraft also boosted profits, the airline said in a filing with the Singapore Exchange. 
Net profit in the three months to December was Sg$275mn ($196mn), up from Sg$202.6mn during the same period last year. 
The airline benefited from lower group expenditure, largely due to a 24% drop in fuel expenses. 
The gain however was partially offset by losses totalling Sg$149mn due to hedging and the local currency’s decline against the US dollar, SIA said. 
One analyst noted that while profits appear robust, it was driven mainly by lower fuel expenses and gains from the disposal of aircraft. 
“You need to take the numbers with a pinch salt because they don’t quite reflect that the company has not done very well,” said Shukor Yusof, founder of Endau Analytics, a Malaysia-based aviation consultancy. 
“All things considered, the outlook remains challenging. Fuel prices are unlikely to stay at this low levels forever,” Shukor told AFP. 
“We’re also concerned over the pace of the economic recovery in the US. The outlook for the EU remains cloudy and there are also concerns about China that will affect the rest of the Asia Pacific economies.” 
The airline, which is facing tough competition from its peers and from budget carriers, added that travel demand will remain “volatile, affected by economic forces and external events”. 
“On the competitive front, expansion of other full-service airlines as well as low-cost carriers, particularly in Southeast Asia, will continue to exert pressure on loads and yields,” SIA said. 
The airline’s shares dipped 0.92% to close at Sg$10.82 before the results were released, bucking a marginal rise in the Straits Times Index.