Pawan Kumar
Last week, Singapore Airlines (SIA) announced that their third quarter
Last week, Singapore Airlines (SIA) said that its net profit for the third quarter, which ended in December, was SGD 628 million (USD 465 million), and that its total profit for the year was SGD 1,555 million (USD 1,152 million). They are the most money the airline has ever made in a quarter and in the first nine months of a financial year.
The airlines said in a statement that this is because “the strong demand for air travel is continuing into the third quarter of FY2022/23, building on the momentum that started when Singapore eased its border restrictions in April 2022.” In April, SIA’s financial year begins.
This comes after Singapore said that, starting on February 13, it will loosen all remaining COVID restrictions for both tourists and people who live there. Travelers who aren’t fully vaccinated against COVID won’t have to show proof of a negative pre-departure test before entering Singapore. They also won’t have to buy travel insurance to cover COVID treatment if they get sick on the island. No longer do people who have been vaccinated have to show proof when they arrive. As of the same date, it is no longer required to wear a face mask on public transportation, which was the last local rule left over from the COVID era.
Singapore was one of the first Asian countries to reopen after the COVID pandemic, which has helped both its tourism industry and its national airline. In addition to government grants to affected industries during COVID, the airline benefited from the confidence of its shareholders and financial institutions in its business. It was able to raise SGD 22.4 billion (USD 16.6 billion) during COVID, including SGD 15 billion from shareholders (the largest of which is state investment firm Temasek Holdings) through the sale of shares and convertible bonds. As of December 2022, it still has SGD 15.4 billion in cash on hand.
Also Read : I Vladimir Putin will be killed by his close confidants: Zelensky
This let it keep most of its staff and fleet, which made it easy to get routes back up and running quickly when travel started again. This was different from other regional airlines, which had to lay off staff and sell planes to stay in business.
SIA said that its group passenger capacity reached 80% of what it was before COVID in December 2022. This was more than the average of 51% in the Asia-Pacific region. Its two main airline brands carried 7.4 million passengers in the third quarter, a 17 percent increase from the second quarter. When the first two quarters are added to the total, 18.8 million people were served by the SIA Group in the first nine months of the financial year. This is nine times more than the same time last year, when most of the world’s borders were still closed.
The Group’s passenger load factors went up by 0.8 percentage points to 87.4%, which was the highest for any quarter. This was because both premium airline SIA (87.3%) and low-cost carrier Scoot had record load factors (87.8 per cent).
SIA said that its cargo performance was lower than the previous quarter due to a drop in demand and a rise in belly hold space as more passenger planes returned to service around the world. Even though yields were lower from one quarter to the next, they were still almost double what they were before COVID.
Overall, SIA’s sales for the three months ending in December went up by SGD 358 million (USD 265 million), which is an increase of 8% from the previous quarter, bringing the total to a record SGD 4,846 million (USD 3,589 million).
Passenger-flown revenue went up by 14%, or SGD 463 million, to SGD 3,767 million. This was because traffic grew by 12.2% for the quarter, which was more than the 11.1% increase in capacity. The Group’s revenue per available seat-kilometer (RASK) was 10.6 Singapore cents, which was the highest it had ever been for a quarter.
Cargo flown revenue dropped 14.1%, or SGD 141 million (USD 104 million), to SGD862 million (USD638 million). Lower yields, which were down 14.6%, were partially offset by a 0.6% increase in loads.
The amount spent went up 7.4%, or SGD281 million (USD208 million), from the previous quarter to SGD4,091 million (USD 3,030 million). This included an increase of SGD 371 million (15.5%) in spending on things other than fuel, which was partially offset by a decrease of SGD 90 million (-6.3%) in the net cost of fuel.
The increase in non-fuel costs was bigger than the increase in capacity. This was mostly due to higher foreign exchange losses of SGD 194 million (USD 144 million) at the end of the current quarter, when the US dollar lost 6.1% of its value against the Singapore dollar. Net fuel cost fell to SGD 1,333 million (USD 987 million) mainly due to a 13 per cent drop in fuel prices. This was partially offset by higher volumes uplifted (+103 million USD) and a lower fuel hedging gain (+19 million USD).
Singapore Airlines reports record quarterly profit
In the quarterly financial report, one of the most important strategic plans for future growth is the deal with Tata Sons (Tata) to give Air India another SGD 360 million (USD 267 million) in November 2022. This will give SIA a 25.1% stake in the bigger Air India group after Tata takes over and Vistara Airlines merges with it. This deal still needs to be approved by the government.
In the statement, SIA said, “The new company will be four to five times bigger than Vistara and will have a strong presence in all of India’s most important airline markets. The proposed merger will increase SIA’s presence in India, strengthen its multi-hub strategy, and let it keep taking part directly in this large and quickly growing aviation market.”
“Part of the SIA Group’s partnerships strategy is to work more closely with airlines that have similar goals. This lets SIA and its partners bring more people to their hubs, give customers more choices, and expand the Group’s reach around the world “the company said.
