SIA cautious on outlook with passengers up, yields squeezed SINGAPORE Airlines expects passenger bookings to pick up in the next few months but has warned yields will be weaker due to the "intense competitive environment." Announcing a 56 per cent rise in first-quarter net profit, the airline group warned in its outlook that the operating environment continued to be affected by the uncertain global economic climate and high fuel prices. "Forward passenger bookings for the next few months are expected to be higher against the same period last year and in line with the planned increase in passenger capacity," it said. However, yields are expected to be weaker as a result of the intense competitive environment. On the cargo front, demand is expected to remain depressed, in turn placing pressure on loads and yields."" The group earned a first-quarter net profit of $S122m, up from $S44m a year ago, but said the improvement was mainly due to the sale of aircraft and exceptional items. This included a net gain of $S336m from the sale of its stake in Virgin Atlantic to Delta Air Lines. Revenue rose 1.7 per cent to $3.84bn, mainly due to $S75m recognised during the quarter relating to aircraft delivery slots A 1.8 per cent rise in passenger numbers was partially offset by weaker yields, intense competition and unfavourable foreign exchange movements for revenue-generating currencies against the Singapore dollar. Group operating profit was up 1.4 per cent in the first quarter to $S82m. The parent airline saw its operating profit rise to $S89m from $S85m a year ago, while SilkAir saw its operating profit drop from $S18m a year ago to $S14m. Load factors fell on both the parent airline (down 1.5 points to 78per cent) and SilkAir (down 6.8 points to 69.9 per cent) as passenger growth lagged capacity increases. SIA Cargo recorded an operating loss of $S40m, an improvements on last year's loss of $S49m, while SIA Engineering's operating profit fell from $S34m a year ago to $S28m. "In this challenging operating environment, the Group will continue to monitor demand trends closely and make appropriate adjustments to flight schedules and capacity, alongside a continued focus on cost discipline,"" the company said.