Singapore Airlines more than doubled its quarterly profit to SGD$575 million (USD$363 million), its first increase in six quarters, helped by a one-off gain from the sale of property.

But the state-controlled company renewed its warning that rising fuel costs -- up 37 percent in the quarter -- would continue to weigh on its profit and that it expected the price of jet fuel to remain high.

It said that the outlook for air travel was broadly positive for the rest of its financial year to the end of March 2007 due to favorable economic conditions in Asia Pacific and Europe.

Singapore Air's first-quarter profit rose thanks to an expected SGD$223 million (USD$140.9 million) gain from the sale of its SIA Building in Singapore's business district.

Excluding that gain and a SGD$109.9 million (USD$69.5 million) gain from the sale of aircraft and spare parts, quarterly profit was SGD$242 million (USD$153 million).

Analysts said once again it was Singapore Air's ability to protect its business from soaring fuel costs by hedging in the futures market that helped it to turn in a decent result.

"They surprised me on the upside. Fuel costs are lower than I had expected and I estimate that it's due to better hedging performance. Staff costs and other expenses were also lower than expected," said Peter Drolet of UOB Kay Hian in Hong Kong. "The fuel price doesn't have to come off for them to do better."

Singapore Air's sales rose 12.4 percent in the quarter to SGD$3.42 billion (USD$2.16 billion) but the increase was almost completely eaten up by a 12.8 percent rise in expenses.

It spent SGD$1.22 billion (USD$771 million), more than double its profit in the quarter, on jet fuel compared to SGD$892 million (USD$564 million) a year ago.

The price of jet fuel has risen 21 percent since the start of the year, making it the airline's single biggest expense at 39 percent of group expenditure.