Singapore Airlines (SIA) has posted a quarterly net profit of $452 million for the 1QFY2025 ended June, a 38.4% y-o-y decrease from the previous year’s $734 million in the same period.
Earnings per share similarly came in 14.% lower y-o-y at 12.4 cents per share, from 14 cents per share in the 1QFY2024.
Meanwhile, group revenue increased by 5.3% y-o-y or $239 million to $4.72 billion in the quarter, with passenger flown revenue rising 4.1% y-o-y or $152 million to $3.83 billion, supported by a healthy 13.8% y-o-y increase in passengers carried across the group to 9.6 million passengers in the 1QFY2025 compared to 8.44 million passengers in the 1QFY2024.
On the other hand, cargo flown revenue was marginally lower than the year before, declining 0.2% y-o-y or $1 million to $541 million. Overall air cargo demand remained buoyant in the period, supported by strong e-commerce flows and increased demand for air freight driven by the Red Sea crisis and port congestion.
This helped to raise the group’s cargo load factor by 5.9 percentage points (ppts) y-o-y to 57.7% during the 1QFY2025, which helped mitigate the 19.1% y-o-y drop in cargo yields to 36.1 cents from 44.6 cents in the previous year.
Group passenger load factor (PLF) dipped marginally by 2.0 ppts y-o-y to 86.9%, with revenue per available seat-kilometre (RASK) similarly decreasing by 7.3% y-o-y to 8.9 cents from 9.6 cents in the 1QFY2024.
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On costs, group expenditure rose by 14.0% y-o-y or $523 million to $4.25 billion, with fuel and non-fuel expenditure increasing by 30.1% y-o-y or $317 million and 7.7% y-o-y or $206 million respectively. Net fuel cost also increased in the period to $1.37 billion, up 30.1% y-o-y.
As a result, the 7.7% rise in non-fuel expenditure was less than the 11.6% increase in overall passenger and cargo capacity.
Thus, for the 1QFY2025, the group posted an operating profit of $470.2 million, a sharp decrease of 37.7% y-o-y or $285 million from the previous year’s $754.5 million.
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On its outlook, SIA says that demand for travel remained robust in the first quarter and is expected to continue in the upcoming months, as will air cargo demand.
Meanwhile, passenger yields are expected to stay below the previous year’s levels as more capacity enters the market, particularly in the Asia Pacific (APAC) region.
The airline adds: “Although yields have moderated with the increase in bellyhold cargo capacity, they remain 18.4% above pre-pandemic levels. 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.”
Fleet and network updates
In the 1QFY2024, SIA added one Airbus A350-900 in April, bringing its fleet to 143 passenger aircraft and seven freighters, while budget carrier Scoot added two Embraer E190-E2 aircraft in the same month, bringing its fleet to 52 passenger aircraft. In total, the group has 88 aircraft on order.
On the group’s flight routes, SIA began services to Brussels, Belgium in April and London Gatwick, UK, in June, while Scoot began services to Koh Samui, Thailand in May and Sibu, Malaysia in June.
As at June 30, the group’s passenger network covered 125 destinations in 36 countries and territories, with SIA serving 78 destinations and Scoot serving 69.
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Furthermore in June, SIA announced plans to launch daily flights between Singapore and Beijing’s Daxing International Airport from November 11, pending regulatory approvals. SIA will also increase its frequency to Beijing Capital International Airport to 21 weekly services from August 5, taking the total number of weekly services to Beijing to 28, reflecting the group’s firm commitment to the key China market.
Lastly, Scoot will serve Subang, Malaysia from September, and will be looking to add more new services in the coming months with its E190-E2 aircraft.
Air India and Vistara merger
The group says that its proposed merger of Air India and Vistara remains on course, with the Indian National Company Law Tribunal granting approval in June, with the transaction remaining subject to Indian foreign direct investment approval.
When completed, the merger will give SIA a 25.1% stake in an enlarged Air India Group with a significant presence in all key segments of the Indian airline market.
Shares in Singapore Airlines C6L closed 6 cents higher or 0.87% up at $6.97 on July 31.
