Singapore Airlines (SIA) on Wednesday reported a decline in the net profit by 21 percent in the first quarter. The revenue growth in the first quarter fell due to a higher share of losses from associated companies, net finance charges, and increased expenditure.

The net profit of Singapore Airelines calculated for the first quarter of the year reportedly fell from S$120 million a year ago to S$111 million.

The increase in fuel prices was the major factor which led to an increase in expenditure. The net fuel prices increased by 6 percent, which also added to an increase in expenditure by nearly 7 percent to S$ 3.9 billion.

“Fuel price volatility is expected to persist in the near term, but the Group’s strong hedge position will help to mitigate any spike in prices,” SIA said.

Two wholly-owned subsidiaries of Singapore Airlines, Silk Air, the regional arm, and Scoot, the low budget airlines, had suffered major losses in the given time period.  Grounding of Silk Air owned Boeing 737 Max aircraft after two deadly crashes was the primary reason for this, causing a loss of S$16 million to the airlines as compared to a profit of $200,000 the previous year. Scoot suffered an operating loss of S$37 million compared to a profit of S$1 million last year.

On the other hand, SIA’s parent company, Singapore Airlines Operation recorded a profit of S$232 million, up by 28.2 percent from the prior year.

Weakened trade due to disputes between major economies like China and the United States reduced the cargo revenues by a huge margin. Singapore Airlines’ earlier investment in alliance partner Virgin Australia also negatively affected the airlines’ profitability.