SINGAPORE, 9 August 2024: Singapore Airlines Group reports a first-quarter (April to June) net profit of SGD452 million despite lower yields and rising fuel costs.
In a business update for the first quarter, released last week, the airline group reported “passenger flown revenue up on capacity growth and strong load factors.”
However, it warned the airline that it would continue to “contend with heightened competition, supply chain, constraints, inflationary cost pressures, and geopolitical uncertainties.”
Financial highlights
Group revenue increased by SGD239 million (+5.3%) year-on-year to SGD4,718 million in the three months ending 30 June 2024. Passenger flown revenue rose by SGD152 million (+4.1%) to SGD3,828 million, supported by a 13.8% increase in passengers carried despite a 4.6% decline in yields. Passenger traffic rose 9.7% year-on-year against a 12.2% growth in capacity, resulting in a two percentage point drop in the group passenger load factor (PLF) to 86.9%.
Group expenditure rose by SGD523 million (+14.0%) to SGD4,248 million, with fuel and non-fuel expenditure increasing by SGD317 million (+30.1%) and SGD206 million (+7.7%), respectively. Net fuel cost increased to SGD1,370 million, mainly due to higher
volumes uplifted (+SGD147 million), an 8.1% increase in fuel prices (+$105 million), and a lower fuel hedging gain (+SGD52 million). The 7.7% rise in non-fuel expenditure was less than the 11.6% increase in overall passenger and cargo capacity.
As a result, the group’s operating profit for the quarter declined by SGD285 million (-37.7%) from the previous year to SGD470 million.
In addition to the weaker operating performance, a reduction in net interest income (-SGD22 million), lower surplus on disposal of aircraft, spares, and spare engines (-SGD8 million), and lower share of profits of associated companies (-SGD6 million) contributed to the decline in the group’s net profit to SGD452 million (-SGD282 million or -38.4%) when compared with the net profit reported in Q12023.
Fleet and network update
As of 30 June 2024, the group’s operating fleet comprised 202 passenger and freighter aircraft with an average age of seven years and four months. In the quarter,
SIA added one Airbus A350-900 in April 2024, bringing its fleet to 143 passenger aircraft and seven freighters. Scoot added two Embraer E190-E2 aircraft in April 2024, bringing its fleet to 52 passenger aircraft2. The group has 88 aircraft on order.
SIA launched services to Brussels (Belgium) in April 2024 and London Gatwick (UK)in June 2024, while Scoot began Embraer E190-E2 operations to Samui (Thailand) in May 2024 and Sibu (Malaysia) in June 2024.
As of 30 June 2024, the group’s passenger network covered 125 destinations in 36 countries and territories.
New flights scheduled
Singapore Airlines will launch daily flights between Singapore and Beijing’s Daxing International Airport on 11 November 2024, pending regulatory approvals.
SIA will also increase flights to Beijing Capital International Airport to 21 weekly services from 5 August 20245. As a result, SIA will operate 28 weekly services to China’s capital city.
Scoot will serve Subang (Malaysia) starting September 2024 and is looking to add more new services in the coming months with its E190-E2 aircraft, which will enable it to reach additional non-metro destinations in the region.
Business Outlook
“Travel demand remained robust in the first quarter and is expected to stay healthy in the upcoming months. The group will remain nimble and agile while seizing potential growth opportunities. Passenger yields are expected to stay below the previous year’s levels as more capacity enters the market, particularly in the Asia Pacific region,” the airline said in its Q1 2024 review.
“The global airline industry continues to face challenges from increased competition, supply chain constraints, inflationary pressures on operating costs, including from airports and service providers, and geopolitical uncertainties.”
