Singapore Airlines Group, comprising of Singapore Airline (SIA) and Scoot posted a record year of profitability in the 76-years of its existence citing return of travel and skyrocketing fares. The Group operating profit came in at a record $2,692 million, reversing the $610 million loss in FY2021/22.
Operating profit for SIA was a record $2,601 million, an increase of $2,713 million from the previous financial year.
Scoot achieved a record operating profit of $148 million, up $602 million from FY2021/22. The Group posted a record net profit of $2,157 million for the year, versus a $962 million net loss in the previous year mainly driven by better operating performance and lower net finance charges and partially offset by a tax expense versus a tax credit last year.
The Group posted a record second half operating profit of $1,458 million, an improvement of $224 million from the first half, as the strong demand for air travel continued into the second half of the financial year.
The Group’s revenues rose $941 million compared to the previous six months to $9,358 million, the highest half-year revenue for the SIA Group while the passenger flown revenue increased $1,408 million on the back of a 24.8% growth in traffic, outpacing the 18.5% expansion in capacity.
Passenger load factor (PLF) rose 4.4 percentage points to a record 87.4%. Cargo flown revenue fell $594 million due to a decline in loads.
The Group posted a second half net profit of $1,230 million, up $303 million from the first half. This was mainly attributable to the better operating performance, net interest income in the second half versus net finance charges in the first half, and partially offset by a higher tax expense
SIA’s cash and bank balances saw an increase of $2.5 billion year-on-year to $16.3 billion. Net cash generated from operations, including proceeds from forward sales, contributed $9.1 billion, while the group paid $3.9 billion for the redemption of the 2020 mandatory convertible bonds. In addition to the cash on hand, the Group continues to retain access to $2.2 billion of committed lines of credit, all of which remain undrawn.
SIA and Scoot collectively carried 26.5 million passengers, up six times from a year before. The passenger load factor (PLF) jumped 55.3 percentage points to 85.4%, the highest in the Group’s history. SIA achieved a record PLF of 85.8%, while Scoot delivered a PLF of 83.9%.
SIA took delivery of one Airbus A350-900 in March 2023 and one Boeing 787-10 in April 2023. These aircraft have since joined the operating fleet, alongside one 737-8 aircraft post cabin retrofit.
As of March 2023, the SIA Group had 195 aircraft in its operating fleet comprising 188 passenger aircraft and seven freighters. SIA’s operational fleet included 133 aircraft and seven freighters, while Scoot had 55 aircraft. With an average age of six years and nine months, the Group fleet is one of the youngest and most fuel-efficient in the airline industry.
SIA Group recently agreed with Boeing to adjust its aircraft order book. This includes swapping three 787-9s for three 787-10s and cancelling eight 737-8s. These adjustments are in line with the Group’s long-term fleet renewal strategy and support its projected operational requirements. Following these adjustments, the Group has 100 aircraft in its order book.
At the onset of the Covid-19 pandemic in 2020, SIA Group acted swiftly and decisively to shore up liquidity and build its financial resilience. This strong liquidity position, and the confidence it engendered, enabled the Group to take a long-term view and make several strategic decisions ahead of the recovery in global air travel, the airline said in a release.
SIA and Scoot retained most of their staff, and a large proportion of the Group’s aircraft fleet was kept operational, ensuring that they were properly maintained and fully functional. The Group built up a strong base network in a calibrated manner, ensuring that SIA and Scoot could ramp up ahead of any return in passenger traffic.