LONDON – Singapore Airlines has released its 2022 first quarter figures. The quarterly profit of $556 million is now one of the best Singapore Airlines Group (SIA) operating profits in its history of operation.
Since the pandemic began, this quarter result is good news for all working for the SIA group. The airline and the entire group are now well equipped and adaptable to change to the working environment.
SIA Group comprises two airlines: Singapore Airlines and Scoot respectively, and are amongst the first airlines to fly out of Changi Airport since borders were gradually eased in September 2021. Since then, numbers have been picking up relatively quickly.
SIA Group has indeed increased its capacity average from 47% of pre-Covid levels in the fourth quarter of the fiscal year FY2021/2022 to 61% in the first quarter of fiscal year FY2022/23.
This enabled the capture of the pent-up demand, and thus able to record a profit of $556 million, which is the second-highest quarterly profit in the history of the airline.
During the second quarter alone, SIA and Scoot transported 5.1 million passengers, which is 158.2% from the previous quarter and 14 times greater than the same quarter last year. Cabin factors also were also high, across all cabin classes and destinations.
Nevertheless, destinations to and from East Asia remain general weak due to prolonging border restrictions, such as Japan and definitely China. The airline’s group quarterly revenue per seat kilometre or RASK was 10.2 cents, which is a record for Singapore airlines.
Significantly, revenue from passengers grew from 119.3% or $1,456 million quarter-on-quarter to $2,676 million from a 126.7% growth in traffic.
The cabin load factor grew from 34.1% to 79%, which is the highest in two years. As predicted, traffic growth outgrew capacity expansion with a 28.9% margin. However, cargo revenue fell by $17 million or (1.5%) to $1,096 million, due to the decline in demand for air freight.
The partial reasons for this are the continuous lockdowns in China and capacity issues.
All in all, SIA group revenue increased significantly by $1,439 million or a +58.2% to $3,911 million. Unsurprisingly, the group’s expenditure rose by $816 million (+32.1%) quarter-on-quarter to $3,355 million.
Like many airlines, the SIA group also faced a hike in fuel prices which resulted in a $527 million jump or a +70.6% in net fuel costs, and a $289 million increase or a +16.1% in non-fuel expenditure.
This ultimately translates to a rise in net fuel cost to $1,273 million, largely attributed to a 40% increase in fuel prices.SIA Group shareholder’s equity stood at $22.9 billion, which is a gradual increase of $0.5 billion from the 31st of March 2022.
SIA Groups will never stop to replace its old fleet, and keep increasing capacity. The airline’s full-service carrier, Singapore Airlines welcomed two Airbus A350-900s, and three Boeing 737-8s MAX that was delivered in the previous fiscal year and also entered into service during the first quarter.
The MAX aircraft were transferred from the now defunct Silk Air. Its low-cost carrier Scoot also welcomed one A320neo which entered delivery this quarter and two A321neo delivered last quarter.
The remaining A320ceos will be slowly replaced by the NEOs as one A320ceo will be removed from the operating fleet for return to its lessor. The current fleet number of SIA fleet stands at 127 aircraft with 7 cargo aircraft as of the end of the second quarter of 2022.
Whilst Scoot, its low-cost arm had 55 aircraft in operation. The average fleet of the group is 6 years, which is one of the lowest in the industry. This means that the passenger’s comfort on SIA Groups will be guaranteed, and also provides a lower carbon footprint per flight flown.
The 1st quarter shows gradual resumption of international routes, especially around South East Asia, flown by SIA and Scoot. These destinations includes Cebu, Davao, Hat Yai, Kota Kinabalu, and Medan, along with Nanjing in China.
The South Korean market recently has gained traction since the relaxation of the pandemic. The low-cost carrier Scoot launched new services to Jeju, South Korea.
Singapore Airlines on the other hand has also made an impressive comeback, with resumptions of routes to Japan, and India ( where the market has already reached its pre-pandemic levels, capacity-wise), and will add more flights to Paris and Los Angeles. Late last year, SIA also introduced flights to Vancouver with positive feedback from customers.
Scoot Airlines also added flights to non-stop service to Tokyo and Osaka, and will also increase flights to Bangkok, Cebu, Manila, Seoul and Surabaya. The Group capacity is expected to increase to approximately 68% of pre-Covid levels in the second quarter and 76% by the end of the third quarter.