Summary
- Profits at Singapore Airlines Group fell by approximately 38% due to increased operational costs, specifically higher fuel expenses.
- Despite a 13.8% rise in passengers carried, the Group’s passenger load factor dropped 2.0%, with passenger yields also decreasing by 4.6%.
- Singapore Airlines Group expands fleets for both Singapore Airlines and Scoot, highlighting the airline’s commitment to growth and efficient operations.
The Singapore Airlines Group has been the standout performer in Asia during the recovery, skillfully managing capacity to stay just ahead of demand and produce high and profitable passenger loads over the last 18 months. Yesterday, the Group released its first-quarter financial results, which show increased year-on-year (YoY) revenues but a significant drop in profits, mainly due to higher fuel expenses.
Profits take a tumble
In the three months ended June 30, 2024 (1Q FY24/25), Singapore Airlines Group, which includes Singapore Airlines and Scoot, reported a total revenue of SGD$4.7 billion ($3.5b), an operating profit of SGD$470 million ($353m) and a net profit of SGD$452 million ($339m). Compared to 1Q FY2023/24, revenues increased by 5.3%, but operating profit fell by 37.7% and net profit by 38.4% YoY, with the latter reducing from SGD$734m ($550m) to SGD$452 ($339m).
Photo: Dmitry Dven | Shutterstock
The Group carried 9.6 million passengers in the first quarter, a 13.8% increase YoY. While revenue passenger kilometers increased by 9.7%, that was outpaced by a gain of 12.2% in available seat kilometers, leading to a fall in the passenger load factor of 2.0 percentage points to 86.9%, with passenger yields declining by 4.6%.
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Operating profit dropped by SGD$285 million ($214m), mainly attributable to an increase of SGD$317 million ($238m) in net fuel costs. Increased flying activity added SGD$147 million ($110m), an 8.1% increase in fuel prices added SGD$105 million ($79m) and a lower fuel hedging gain another SGD$52 million ($39m) in 1Q2024/25.
Photo: Markus Mainka | Shutterstock
The Group does not release financial performance for its airlines, but operationally, Singapore Airlines (SIA) carried 6.4 million and Scoot 3.2 million passengers between April and June, with YoY increases of 17.7% and 6.7%, respectively. At the end of the first quarter, the Group’s operating fleet comprised 202 aircraft with an average age of seven years and four months.
A balanced fleet
In April, SIA added one Airbus A350-900, increasing its fleet to 143 passenger aircraft and seven freighters, including 22 Boeing 777-300ERs, 22 787-10s, seven 737-800s and 16 737 MAX 8s. It also has 12 Airbus A380s and 64 A350s in its widebody fleet. Scoot has a 52-aircraft fleet comprising 11 Boeing 787-8s, 10 787-9s, 20 Airbus A320s, nine A321neos and two Embraer E190-E2 jets.
Photo: DLeng | Shutterstock
The Group also has 88 aircraft on order, including one A350, 12 A320neos, six A321neos, seven A350Fs, 31 777-9s, 11 787s, 13 737 MAX 8s and seven Embraer E190-E2s. The network covers 125 destinations in 36 countries and territories, with SIA serving 78 and Scoot 69, while the cargo network touches 129 destinations in 37 countries and territories.
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In April, SIA began flying from Singapore Changi International (SIA) to Brussels and in June to London Gatwick, while Scoot launched its Embaer E190-E2 services to Koh Samui (Thailand) in May and Sibu (Malaysia) in June. Starting in September, Scoot will operate flights from Subang Airport (Malaysia) and add more Embraer services to non-metro destinations in the region.
Singapore Airlines is adding more flights to Beijing, launching daily services to Beijing Daxing International (PKX) from November 11, and increasing frequency to Beijing Capital International (PEK) to 21 weekly services from August 5, 2024. The Group said the proposed merger of Air India and Vistara is on course, and when completed, the Group will have a 21.5% stake in the enlarged Air India Group.