Singapore Airlines Group has reported an improvement performance for the fiscal year 2021/2 first quarter with passenger traffic up and cargo continuing to bolster revenue.
An increase in both passenger and cargo flown revenue resulted in SIA Group revenue increasing by $444 million (+52.2%) year-on-year to $1,295 million. However, the SIA Group recorded a first quarter operating loss of $274 million, an improvement of $763 million (+73.6%) from the $1,037 million operating loss recorded last year.
Cargo flown revenue grew by $214 million (+32.4%), as the calibrated resumption in passenger flights contributed to an increase in cargo capacity (+46.9%) and loads carried (+68.2%). Cargo load factor increased 11.3 percentage points to 89.1%, while yields moderated from the exceptionally high levels during the same period last year.
Group expenditure fell by $319 million (-16.9%) to $1,569 million. Net fuel cost increased by $205 million (+132.3%) to $360 million mainly due to higher fuel prices, as well as an increase in the volume uplifted in tandem with the capacity expansion. There was a fuel hedging gain of $13 million, compared to a loss of $71 million for the same period last year. Mark-to-market gains of $72 million were also recognised on ineffective fuel hedges, reversing the $464 million losses recognised in the prior year. Non-fuel expenditure was at $1,281 million, up $12 million (+0.9%) as higher costs from the increased flying activities were partially mitigated by lower depreciation after surplus aircraft were removed from the fleet.
Border controls and travel restrictions remained largely in place during the first quarter of FY2021/22, despite the growing pace of Covid-19 vaccinations in Singapore and in key markets for the SIA Group around the world. The Group’s passenger traffic (measured in revenue passenger-kilometres) grew year-on-year on the back of a calibrated increase in passenger capacity (measured in available seat-kilometres), which rose to 28% of pre-Covid-19 levels by the end of the quarter in June 2021. The passenger load factor (PLF) for the first quarter increased 4.6 percentage points year-on-year to 14.8%.
The SIA Group has successfully raised $21.6 billion in fresh liquidity since 1 April 2020. As at 30 June 2021, the Group’s shareholders’ equity was $22.3 billion, an increase of $6.4 billion compared to 31 March 2021. Cash and bank balances saw an increase of $5.9 billion, rising to $13.7 billion primarily due to the issuance of Rights 2021 Mandatory Convertible Bonds. Total debt balances increased by $700 million to $15.1 billion, attributable to the increase in lease liabilities as a result of sale-and-leaseback activities. Consequently, the Group’s debt-equity ratio fell from 0.90 times to 0.67 times. In addition to the cash on hand, the Group continues to retain access to $2.1 billion of committed lines of credit that remain undrawn at present.
Three new Airbus A350s entered into service with SIA during the quarter, while two Airbus A330s were removed from the operating fleet for lease return checks. As at quarter end, Singapore Airlines’ operating fleet comprised 115 passenger aircraft2 and seven freighters.
Scoot added its first three Airbus A321neo aircraft into its operating fleet, while one Airbus A320ceo was removed for lease return checks. The inaugural A321neo flight was from Singapore to Bangkok on 28 June 2021, offering better operating economics and giving Scoot additional flexibility to add capacity as demand returns. At the end of the quarter, Scoot’s operating fleet consisted of 49 passenger aircraft.
As at 30 June 2021, the SIA Group had an operating fleet of 164 passenger aircraft and seven freighters with an average age of five years and 11 months.
SIA Group expects passenger capacity to be around 33% of pre-Covid-19 levels in the second quarter of FY2021/22. By end of September 2021, the SIA Group expects to serve around 50% of its passenger network before the onset of Covid-19.