SIA Reports a Record Quarterly Net Profit of S$734 million for 1Q23

The Singapore Airlines (SIA) Group has experienced a significant rise in revenue for the first quarter ended 30 June 2023, with a YoY growth of 14% to S$4,479.3 million, owing to the strong demand for air travel during the mid-year school holidays and summer travel season. Specifically, passenger flown revenue surged to S$1,001 million (+37.4% YoY) on robust travel demand. The gains were partially offset by a decline in cargo revenue of S$555 million (-50.6% YoY) on softening demand and increased capacity.

The group's expenditure in Q1 FY2023/24 increased by S$353 million (+10.5% YoY) to S$3,725 million due to a rise in non-fuel expenditure of S$572 million (+27.3% YoY), which was partially offset by a decrease of S$220 million (-17.3% YoY) in net fuel cost. The reduction in fuel costs was mainly driven by lower fuel prices.

Thanks to higher pax revenue and lower net fuel cost, the group achieved its highest first-quarter operating profit in history, reaching S$755 million (+35.8% YoY).

The Q1 net profit of S$734 million (+98.2% YoY) is also a record quarterly net profit, mainly driven by improved operating performance, a net interest income versus a net finance charge last year, and a share of profits versus a share of losses of associated companies last year.

1) Group passenger capacity saw a YoY growth of 32.4% as restrictions on air travel eased globally. During the quarter, SIA and Scoot carried 8.4 million passengers, representing an impressive 65.5% YoY increase, with robust demand across all route regions and market segments.

2) Passenger traffic and load factors showed improvement across all markets, with a YoY traffic growth of 49.0%, outpacing capacity expansion. Furthermore, the group attained its highest-ever quarterly passenger load factor (PLF) of 88.9%, along with the highest first-quarter revenue per available seat-kilometer (RASK) of 9.6 cents/ask.

1) Cargo loads dropped 11.3% YoY to 1,215.5 million tonne-km, while capacity grew by 12.1%, primarily due to the increase in belly hold capacity resulting from more passenger flights returning to service.

2) The cargo load factor fell by 13.7 pts to 51.8%, and cargo yields declined by 44.3% compared to last year. Nevertheless, cargo yields at 44.6 cents per load tonne-km remained 50% above the pre-Covid level of 29.7 cents per load tonne-km in the first quarter of FY2019/20.

The group anticipates strong forward passenger bookings momentum over the next three months while expecting the cargo demand to remain soft in the near term due to inflation and weak economic conditions.