Singapore Airlines Recorded a Historic High Net Profit in the Past Six Months

Singapore Airlines achieved its highest historical passenger load factor in the past six months. In 1H FY2023/24, SIA and Scoot carried 17.4 million passengers (+52.3% YoY). Compared to one year ago, there was a 38.0% increase in passenger traffic, surpassing the 29.0% capacity expansion. The Group's passenger load factor (PLF) also increased by 5.8 percentage points to 88.8%, marking the highest historical half-yearly PLF. Despite weak air cargo demand due to factors such as inventory backlog, geopolitical challenges, and macroeconomic headwinds, the Group increased its revenue reaching $9,162 million (+8.9% YoY). Passengers' operating revenue increased to $7,550 million (+26.3% YoY), partly offsetting the decline in cargo operating revenue to $1,060 million(-49.5% YoY). As passenger aircraft have more cargo capacity, the Group's cargo load factor decreased by 8.4 percentage points YoY to 52.7%, as cargo volume declined by 6.0% while capacity expanded by 8.9%. Competition and weak demand also exerted downward pressure on cargo yields, which fell by 46.2% YoY.

Nonetheless, the Group's net cargo load revenue per tonne kilometer was 41.8 cents, still 37.0% higher than pre-pandemic levels. Expenditure increased 5.9%, with non-fuel expenditure rising by $840 million (+18.7%), partially offsetting the impact of a decrease in net fuel costs by $413 million (-15.3%). Net fuel costs decreased to $2,283 million due to a 29.2% drop in fuel prices. The 18.7% increase in non-fuel expenditure was consistent with the overall 19.9% growth in passenger and cargo capacity.

Singapore Airlines recorded a historical high in operating profit for the second quarter. In the second quarter FY23/24, operating profit reached $799 million (+17.8% YoY). Group revenue reached $4,683 million (+4.3% YoY). Due to a 28.9% growth in traffic volume, passenger flown revenue reached $3,873, which increased by $570 million (+17.3%). Group PLF increased by 2.0 percentage points to 88.6%, driven by traffic growth exceeding capacity expansion (+26.0%). The decrease of $484 million in cargo operating revenue, representing a YoY decline of 48.3% to $519 million, was due to weak demand and the recovery of cargo capacity in the industry. Despite the decrease in cargo operating revenue, the net cargo load revenue per tonne kilometer was 39.2 cents, still 28.5% higher than pre-pandemic levels. There was no change in cargo volume YoY, but capacity increased by 6.0%, leading to a 3.5 percentage point decrease in cargo load factor to 53.5%.

The Group's net profit in the second quarter was $707 million, an increase of 26.9% from a year before. The Group's expenditure increased to $3,884 million (+1.9% YoY ). Non-fuel expenditure rose by $267 million (+11.2%), partially offsetting the impact of a decrease in net fuel costs by $193 million (-13.6%). Net fuel cost decreased to $1,230 million, mainly due to a 25.2% drop in fuel prices, partially offset by the impact of a volume increase +$262 million and lower fuel hedging gains $72 million. The growth in non-fuel expenditure was lower than the overall capacity expansion of 17.0%, including cargo. In addition, in terms of assets and liabilities, the Group's balance sheet remained healthy and is one of the strongest in the industry.

The Development of Singapore AirlinesA significant improvement in fleet development for Singapore Airlines in the second quarter. Three aircraft were added to its operating fleet, including one Airbus A350-900 (delivered in July 2023) and two Boeing 787-10s (delivered in August and September 2023 respectively). As of September 30, 2023, the Group's operating fleet consisted of 202 aircraft, including 195 passenger planes and 7 freighters. Singapore Airlines' operating fleet comprises 140 passenger planes and 7 freighters, while Scoot has 55 passenger planes. The Group also has 96 aircraft on order awaiting delivery.

Singapore Airlines has resumed flights to many destinations, andnetwork development covers 119 destinations in 36 countries and regions. In the second quarter, Singapore Airlines resumed flights to Busan, while Scoot resumed flights to Jinan, Nanchang, and Shenzhen. The cargo network covers 124 destinations in 38 countries and regions. During the Northern Winter Season from October 29, 2023, to March 30, 2024, Singapore Airlines will resume flights to Chongqing (in November 2023), Chengdu (in December 2023), and Xiamen (between December 2023 and January 2024). In the Northern Summer Season from March 31, 2024, to October 26, 2024, Singapore Airlines will increase its services to various destinations within its network. It also plans to launch four weekly direct flights from Singapore to Brussels starting April 2024, subject to regulatory approval. The Group expects its passenger load factor to reach an average of around 92%, equivalent to pre-pandemic levels in December 2023. The Group anticipates a phased recovery to pre-pandemic capacity levels across its entire network by FY2024/25 through gradually increasing services.