Singapore Airlines (SIA) returned to profitability in the third quarter of the current financial year–hopefully turning its back on two straight quarters of losses. The flagcarrier’s operating profit of the quarter ending on Dec. 31, 2009, was S$323 million, marking a major turnaround after the S$159 million loss suffered in the second quarter. Group revenues in the third quarter climbed by almost 11 percent over the second quarter to reach S$34.4 billion.

During the third quarter, SIA cut costs by S$169 million, spending 5 percent less than in the previous three-month period. The airline has been desperately trying to reverse heavy losses it has incurred over the past year with disadvantageous hedging on fuel prices and has also taken a bad hit from the dramatic dip in demand for cargo flights. The company has said the continued recovery in traffic volumes in January gives it hope that it may continue its recovery path during the fourth quarter, especially since yields are also holding up after very substantial decline in the first half of last year.