Singapore Airlines reports a Q1 2022 net profit
Singapore Airlines (SIA) swung to a first-quarter net profit of S$370 million ($268 million), it said on Thursday Jul. 28, after a fourteen-fold increase in passenger traffic year on year thanks to an easing of COVID-19 travel restrictions.
The figure was a major improvement from the S$409 million loss in the first quarter a year earlier when more than two-thirds of its revenue was from cargo.
SIA Group’s latest operating results showed that its two airlines – SIA and Scoot – carried a total of 5.1 million passengers in the first quarter, up 158.2 per cent from the previous quarter.
SIA’s revenue tripled to S$3.9 billion in the three months to Jun 30 and its quarterly operating profit of S$556 million was the second highest in the company’s history.
The airline has been ramping up capacity from its Singapore hub and expects to reach about 81 per cent of pre-pandemic levels by the end of December, up from 61 per cent in the June quarter.
“Travel demand is expected to remain robust in the near term as we head into the year-end holiday travel period, with forward sales staying buoyant for the next three months up to October 2022,” SIA said in a statement.
Revenue per available seat kilometre, a measure combining airfares and the percentage of seats filled, reached a record peak at its full-service airline during the June quarter, the carrier said.
Travel demand has rebounded strongly in all regions except East Asia, where rules remain stricter than most of the world.
SIA, however, said inflationary pressures including elevated fuel prices remain a concern.
“Interest rate hikes and slowing economic growth in many countries around the world, including the SIA Group’s key markets, are risk factors to passenger travel recovery and air cargo demand,” the airline said.
SIA reported an operating cash surplus of S$1.48 billion during the first quarter.
Passenger capacity is expected to reach 68 per cent of pre-pandemic levels in the second quarter, before improving to 76 per cent in the third quarter.
In response to the strong demand for air travel, SIA said it will increase services to points across Japan and restore its Indian network to pre-pandemic levels.
It will also add more flights to Los Angeles and Paris, and continue its direct services to Vancouver.
Scoot will launch non-stop services to Tokyo (Narita) and Osaka, as well as add more flights to Bangkok, Cebu, Manila, Seoul and Surabaya.
As of end-June, the group’s passenger network covered 98 destinations in 36 countries and territories.
This compares with a pre-pandemic network of 137 destinations in 37 countries and territories.
Its strong performance contrasts with Hong Kong-based rival Cathay Pacific Airways, which has been hampered by strict passenger and crew quarantine rules.
Cathay expects its passenger capacity to approach up to 25 per cent of pre-pandemic levels by year-end, up from 11 per cent in June.
Singapore will resume operations at its main airport’s fourth terminal on Sep 13, the Changi Airport Group said last week, citing a strong rebound in passenger demand.
“The SIA Group has strengthened its operational and financial foundations during the COVID-19 pandemic, and will continue to invest in our people and the business to meet our growth plans and ensure that we emerge stronger,” it said, adding that it has resumed cabin crew recruitment after a two-year hiatus.
“The Group has ramped up resources at the various touchpoints to beyond pre-COVID levels, and increased the number of online self-service options, to better support customers. We are working closely with our ecosystem partners globally to continue to improve the airport experience for our customers.” channelnewsasia.com