Singapore Airlines on Wednesday posted a 38 percent drop in quarterly profit, hit by high jet fuel costs and cut-throat competition.

Fourth-quarter net profit fell to SGD$297.8 million (USD$181.4 million) from SGD$478 million (USD$291.1 million) a year earlier and SGD$476 million in the third quarter.

Full-year earnings, however, rose sharply to SGD$1.39 billion (USD$846.6 million) from SGD$849.3 million (USD$517.3 million) the previous year, when the airline was still feeling the effects of the SARS virus outbreak which battered Asia's travel industry.

Analysts have said profitability at the airline, which is 57 percent government-owned and known for its premium service even in economy class, is still exceptional in an industry dominated by ferocious competition.

Profits at Singapore Air contrast sharply with quarterly losses of hundreds of millions of dollars racked up by major US carriers US Airways, American Airlines and Continental Airlines.

The industry's main worry this year remains the unpredictable price of fuel, which has overtaken staff costs as Singapore Air's single-biggest expense.

The price of kerosene soared more than 50 percent from the start of this year to a high around USD$76 a barrel on April 10, but has since dropped back to near USD$65.

To try and offset the impact on profits, Singapore Air has increased a surcharge on long-haul flight ticket prices four times since last June, to around USD$30.