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Singapore Airlines profit plunges as demand wanes

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SINGAPORE — Singapore Airlines said its January-March profit plunged 92% as travelers cut down on trips amid a global economic slowdown.

SINGAPORE — Singapore Airlines said its January-March profit plunged 92% as travelers cut down on trips amid a global economic slowdown.

The carrier’s net profit for its fiscal fourth quarter was 41.9 million Singapore dollars ($28.7 million), down from SG$528 million a year earlier, it said in a statement Thursday.

Singapore Airlines flew 3.9 million passengers last quarter, 18% fewer than a year earlier.

“Advance bookings indicate that the drop in demand for air travel is leveling out,” the company said. “However, the probability of a sustained recovery has been set back by uncertainties arising from the Influenza A epidemic.”

The airline has scrambled to cut flights to the U.S., Europe and Asia as demand dried up. From April to March 2010, the company plans to reduce capacity by 11% and decommision 16 passenger aircraft from its fleet.

“Action taken to trim excess capacity, together with a strong balance sheet, will help to sustain the company through the downturn,” it said. “In the near term, promotional pricing and reduced business travel will keep revenue under pressure.”

Revenue fell 19% to SG$3.3 billion for the quarter while expenditures dropped 8% to SG$3.3 billion.

A collapse in oil prices reduced spending on fuel by SG$666 million, but losses from hedging soared to SG$543 million, the company said.