Singapore Airlines (SIA) has reported a more positive financial picture in its responses to shareholder questions ahead of its annual general meeting (AGM) scheduled for Tuesday (Jul 26).
The airline group said it carried 5.1 million passengers during Q1 FY2023 – up 158.3% quarter on quarter and more than 14 times as high as the same period of the prior year. The group’s passenger load factor was 79% for the three-month period – up 34.1 percentage points quarter on quarter and 64.2 percentage points higher year on year.
SIA further stated that its ramp up in capacity – from an average of 47% of pre-pandemic levels in Q4 FY2021/22 to 61% in Q1 FY2022/23 – will continue and is projected to go up to around 68% in Q2 FY2022/23, and around 76% by Q3 FY2022/23.
SIA reported “robust” forward sales for the next three months up to October 2022 and expects demand to “remain steady into the year-end holiday travel period”.
Cargo continues to provide stable revenue for the group and its business segment recorded its best year in FY2021/22, buoyed by tight airfreight capacity and strong demand that resulted in elevated yields. Cargo flown revenue reached a record $4.3 billion in FY2021/22, bolstering the SIA Group’s operating performance. The cargo segment is expected to continue to perform above pre-Covid levels in the near term, due to continued on-going supply chain disruptions and industry capacity constraints. However, the group warns that “some volatility can be expected due to seasonal variations in demand and pandemic control measures in China”.
Since the onset of the pandemic, the SIA Group has raised a total of $22.4 billion of fresh liquidity from various sources. The group states that it will continue to monitor the markets and “weigh all options for its prevailing liquidity as well as near-term and long-term funding needs”.
SIA is currently hedged in Brent at about 40% of expected consumption for the period from Q1 FY2022/23 to Q1 FY2023/24, at an average price of US$60 per barrel.
The group is also seeking the renewal of the share buyback mandate, which it hopes will retain the Company’s “flexibility to undertake share purchases or acquisitions, up to the 5% limit of the total issued shares”.