The performance of Singapore Airlines, the world’s second most valuable airlines was much better than anticipated. Its quarterly profits jumped almost seven times S$278 million as compared to S$42 million last year. The jump in profits was mainly due to advance travel booking and encouraging cargo demand.

Another factor which helped it to post better profits was increasing demand in the Asian market. But threats from volcanic eruption in Iceland and economic problems in the European Union remain. Traffic from Europe contributes 25% to the revenues of Singapore Airlines.

The growth of emerging economies like China and India apart from the overall growth in Asian travel will further help it to post better results, noted experts.

But some felt that the overall improvement may not be very good and Europe and problems in Iceland can put a lot of pressure on airlines.

Singapore Airlines has a share of 55% from Singapore state investor Temasek Holdings. The disruptions in Europe have already cost Singapore Airlines S$50 million.

The recent recovery helped Singapore Airways to avoid its first ever annual loss. It also posted a net profit of S$216 million.

It also lost S$460 million due to fuel hedging in its full financial year. This also resulted in a loss of S$16 million in the fourth quarter.

Its shares have also declined 5% since the start of the year.