Singapore Airlines (SIA) has made a solid but unspectacular start for the first quarter, with a 56.2 per cent rise in net profit to $121. 8 million.

Revenue for the three months ended June 30 was up 1.7 per cent at $3.84 billion.

The sharp improvement in profit was mainly due to gains from the sale of aircraft and exceptional items, including a net gain of $336 million from the sale of the company's stake in Virgin Atlantic Limited to Delta Air Lines.

On the other hand, a restructuring impairment cost of $293 million was booked on four surplus SIA Cargo freighter aircraft that have been removed from the operating fleet and marked for sale.

Flagship carrier SIA saw an increase of 1.6 per cent in passengers carried, in terms of revenue passenger during the quarter.

However, this lagged behind capacity expansion of 3.5 per cent, resulting in a 1.5 percentage-point drop in passenger load factor to 78 per cent.

SilkAir's capacity expanded by 16.6 per cent but passenger carriage grew at a slower pace of 6.2 per cent.

Consequently, passenger load factor fell 6.8 percentage points to 69.6 per cent.

SIA Cargo's load factor of 62.5 per cent was marginally lower year-on-year as carriage fell 5.3 per cent, more than the 4.8 per cent reduction in cargo capacity.

Earnings per share increased to 10.4 cents from 6.6 cents while net asset value per share inched up to $11.30 from $11.15 as at March 31.

Looking ahead, SIA said the group's operating environment will continue to be buffeted 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."

Meanwhile, demand for air cargo is expected to remain depressed.