SIA reports record half-year results

The Singapore Airlines (SIA) Group reported that continued robust demand for air travel in the Northern Summer travel season, led by the rebound in passenger traffic to North Asia with the full reopening of China, Hong Kong SAR, Japan, and Taiwan, resulted in record half-year operating and net profits for the SIA Group. Group revenue rose by 8.9% to $9,162 million, with a 26.3% increase in passenger flown revenue to $7,550 million, although this was partially offset by 49.5% decline in cargo flown revenue to $1,060 million. 

SIA and Scoot carried 17.4 million passengers in the first six months of FY2023/24, an increase of 52.3% year-on-year. Passenger traffic grew 38.0% from a year before, outpacing the capacity expansion of 29.0%. As a result, the Group passenger load factor (PLF) improved by 5.8 percentage points to 88.8%, the highest ever half yearly PLF. SIA and Scoot achieved record PLFs of 88.0% and 91.3% respectively. 

The demand for air freight remained soft due to inventory overhang, as well as geopolitical and macroeconomic headwinds. The cargo load factor fell 8.4 percentage points to 52.7% year-on-year as cargo loads dipped 6.0%, while capacity grew 8.9% mainly due to increased passenger aircraft bellyhold space. Increased competition and softer demand also contributed to the downward pressure on cargo yields, which fell by 46.2% from a year before. Nevertheless, at 41.8 cents per load tonne- kilometre, cargo yields remained 37.0% above pre-pandemic levels1. 

Costs rose by 5.9% to $7,609 million, with the rise in non-fuel expenditure of 18.7% partially offset by a $413 million decrease in net fuel cost. Net fuel cost fell to $2,283 million mainly due to a 29.2% decrease in fuel prices, said SIG. The 18.7% increase in non-fuel expenditure was in-line with the 19.9% increase in overall passenger and cargo capacity. 

Overall, the Group recorded an operating profit of $1,554 million, $320 million higher than a year before. The Group posted a net profit of $1,441 million, 55.4% more than the previous year on the strong operating performance.  

The Group posted a record quarterly operating profit of $799 million for the second quarter, an increase of 17.8% over last year, on the back of the strong demand over the peak summer season. 

SIA Group’s total debt balances decreased by $0.7 billion to $14.7 billion, mainly due to the repayment of borrowings. Consequently, the Group’s debt- equity ratio increased from 0.77 times to 0.85 times. 

Cash and bank balances saw a decrease of $2.8 billion to $13.5 billion, which was partially mitigated by the $2.6 billion of net cash generated from operations. In addition to the cash on hand, the Group retains access to $2.4 billion of committed lines of credit, all of which remain undrawn.  

SIA added three aircraft to its operating fleet in the second quarter – one Airbus A350-900 (delivered in July 2023) and two Boeing 787-10s (delivered in August 2023 and September 2023). 

As of 30 September 2023, the Group’s operating fleet had 202 aircraft comprising 195 passenger aircraft and seven freighters. SIA’s operating fleet comprised 140 passenger aircraft and seven freighters, while Scoot had 55 passenger aircraft3. The Group has 96 aircraft4 on order. 

SIA stated that it expects to return to pre-Covid capacity pandemic levels within FY2024/25 with the progressive ramp-up of services across the network. 

On 25 October 2023, SIA redeemed all of the S$600 million 3.16% five-year fixed-rate notes upon its maturity, and on 7 November 2023, the company announced its intention to redeem 50% of the remaining MCBs that were issued in June 2021. The accreted principal amount payable, being 110.408% of the principal amount of the MCBs, will be $1,710.4 million.