SIA Group Posts Latest Results

The SIA Group has posted its latest results, reporting:

  • 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

It indicates that 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. It carried 18.8 million passengers during the nine months ended Dec. 31, 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-19 levels.

As a result, Group revenue for the three months to Dec. 31 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. Cargo flown revenue fell $141 million (-14.1%) to $862 million, with the lower yields (-14.6%) partially mitigated by a slight uptick in loads (+0.6%).

Expenditure grew by $281 million (+7.4%) quarter-on-quarter to $4,091 million. This comprised a $371 million rise in non-fuel expenditure (+15.5%) that was partly offset by a $90 million decrease (-6.3%) in net fuel cost. The increase in non-fuel expenditure was higher than the increase in capacity, mainly driven by higher foreign exchange losses (+$194 million) recorded at the end of the current quarter with the US dollar weakening 6.1% against the Singapore dollar3. Net fuel cost fell to $1,333 million, mainly due to a 13% drop in fuel prices (-$226 million). This was partly offset by higher volumes uplifted (+$103 million) and lower fuel hedging gain (+$19 million).

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. This was largely due to higher non-fuel expenditure (-$340 million), mainly driven by a foreign exchange loss in the current quarter versus foreign exchange gain in the previous quarter (-$229 million), and partly mitigated by higher operating revenue (+$182 million) as well as lower net fuel cost (+$110 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 strong performance by both SIA and Scoot is a testament to the success of the Group’s portfolio strategy, which enables it to effectively capture growth in different traffic segments by deploying the right vehicles to the right markets.

The Group posted a net profit of $628 million, $71 million higher (+12.7%) from the previous quarter. This was due to the better operating performance (+$77 million), net interest income in the current quarter versus net finance charges in the previous quarter (+$71 million), and partially offset by a higher tax expense (-$90 million).

During the third quarter, SIA and Scoot stepped up services to meet the strong travel demand during the year-end holiday season.

With the relaxation of travel restrictions to selected key markets, the Group reinstated services to destinations in China and Indonesia, and added frequencies to Hong Kong, Seoul, Taipei, and points in Japan.

Scoot resumed operations to Hokkaido (Sapporo), offering scheduled services via Taipei as well as direct seasonal services until February 2023. As of Dec. 31, 2022, the Group’s passenger network covered 111 destinations in 36 countries and territories. SIA served 76 destinations and Scoot served 57 destinations. The cargo network comprised 116 destinations in 38 countries and territories.

The SIA Group is resuming services to China as this key market opens up to international travel. Currently, SIA and Scoot serve a total of 149 destinations in China compared to 25 points pre-pandemic.

During the current quarter, Scoot expanded its Indonesia network with the launch of flights to Balikpapan. For the Northern Summer operating season (March 26, 2023 to Oct. 28, 2023), Scoot will expand its services to China with flight resumptions to Haikou, Nanning, Ningbo, Shenyang, and Xi’an, and step up frequencies to Athens, Langkawi, Manado, Perth, Taipei-Tokyo (Narita), and Taipei-Hokkaido (Sapporo).

SIA will mount supplementary flights to Barcelona, Frankfurt, and Rome during the 2023 summer peak. Services to Busan will resume in August 2023.

Scoot’s services to Gold Coast and SIA’s services to Vancouver will be suspended with effect from July 2023 and October 2023 respectively, as the Group adjusts its capacity in response to demand.

Group capacity is projected to reach an average of around 77% of pre-Covid-19 levels in the fourth quarter of FY2022/23.

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