- Highest ever quarterly operating profit, nine-month operating and net profits
- Record passenger load factors for the SIA Group on robust demand across network
- Strong momentum in forward passenger sales for the fourth quarter
- Weaker global demand and increased capacity weigh on the air freight segment
According to the Singapore Airlines (SIA) Group, the robust demand for air travel continued into the third quarter of FY2022/23, building on the momentum that began after Singapore relaxed its border restrictions in April 2022.
The Group passenger capacity reached 80% of pre-Covid-19 levels in December 2022, higher than the average of 51%2 for the Asia-Pacific region. SIA and Scoot carried 7.4 million passengers in the third quarter, up 17% from the second quarter. The Group carried 18.8 million passengers during the nine months ended 31 December 2022, up nine-fold from a year before. Passenger load factors for the Group improved 0.8 percentage points to 87.4%, the highest for any quarter, on the back of record load factors for both SIA (87.3%) and Scoot (87.8%).
The cargo segment’s performance moderated compared to the previous quarter due to softening demand, as well as an increase in bellyhold capacity as more passenger aircraft returned to service globally. While yields were weaker quarter-on-quarter, they remained elevated – almost double – compared to pre-Covid-191 levels.
As a result, Group revenue for the three months to 31 December rose $358 million (+8.0%) quarter-on-quarter to $4,846 million. This is a record quarterly revenue for the Group. Passenger flown revenue increased by $463 million (+14.0%) to $3,767 million as traffic grew 12.2% for the quarter, outpacing the 11.1% expansion in capacity. Revenue per available seat-kilometre (RASK) was 10.6 cents, the highest quarterly RASK in the Group’s history.
The Group posted an operating profit of $755 million for the third quarter, up $77 million (+11.4%) from the previous quarter. Operating profit for SIA was $48 million (-7.0%) lower quarter-on-quarter at $636 million. Scoot achieved a record quarterly operating profit of $135 million, up $123 million or more than 11-fold from the previous quarter. The low-cost carrier’s operating revenue surged to a record $592 million (+$145 million), significantly outpacing the increase in operating expenditure (-$22 million).
The demand for air travel is expected to be robust in the fourth quarter, supported by the recovery in East Asia as travel restrictions ease across China, Hong Kong, Japan, and Taiwan. Forward sales remain strong across all markets for both leisure and business travel, as well as all cabin classes.
Demand for air freight is expected to face headwinds, in addition to the seasonally weaker fourth quarter. This is due to macroeconomic concerns, and a slowdown in new orders as importers trim inventory levels. The increase in bellyhold cargo capacity will also increase the pressure on cargo yields.
The airline industry continues to face geopolitical challenges, slowing economic growth, high cost inflation, and elevated fuel prices. Competition is likely to intensify as airlines inject more capacity on international routes.
“The SIA Group’s robust financial position, its commitment to offer customers best-in-class products and services, as well as its enhanced agility and resilience emerging from the Covid-19 pandemic, will allow it to retain its leadership position in the industry. The strong performance by both SIA and Scoot is a testament to the success of the Group’s portfolio strategy” mentions Takis Dimitriou, Head of Asian Aviation, GSA of Singapore Airlines and Sctoo for Greece and Cyprus.