Singapore Airlines (SIA) has reversed into the black with a net profit of $370 million for the 1QFY2022/2023 ended June, compared to the $409 million loss in the 1QFY2021/2022 and compared to the $210 million loss in the 4QFY2021/2022.
The higher net profit was mainly due to the better operating performance and the absence of non-cash impairment charges.
During the quarter, the airline’s operating profit stood at $556 million making this SIA’s second-highest quarterly operating profit in its history after its highest ever quarterly operating profit of $675 million in the 3QFY2007/2008.
The surge in operating profit came as the demand for air travel rose sharply after Singapore fully opened its borders to vaccinated travellers in April 2022.
1QFY2023’s operating profit is also a reversal from the $274 million loss seen in the same period the year before.
During the quarter, SIA and Scoot carried 5.1 million passengers, up 158.2% from the previous quarter and fourteen-fold up from the year before.
See also: Trump wins Republican nomination, setting up rematch with Biden
According to the group, passenger traffic and load factors were “robust” across all cabin classes and travel segments, as well as all regions except East Asia where border restrictions remain in certain markets.
SIA’s quarterly revenue per available seat-kilometre was 10.2 cents, a record for the full-service airline.
During the quarter, total revenue surged 202% y-o-y to $3.91 billion, thanks to the higher passenger flown revenue and slightly offset by the lower cargo flown revenue.
Passenger flown revenue rose 119.3% q-o-q to $2.68 billion on the back of a 126.7% growth in traffic. Passenger load factor rose 34.1 percentage points to 79.0%, the highest since the onset of Covid-19.
Cargo flown revenue fell 1.5% q-o-q to $1.10 billion as the demand for air freight dropped due to the pandemic-related lockdowns in China.
The decline in cargo loads was mitigated by higher yields amid capacity constraints on key lanes especially between Asia and Europe.
Total expenditure increased by 113.8% y-o-y to $3.36 billion due to a rise in net fuel costs and non-fuel expenditure.
For the three-month period, the group recorded an operating cash surplus of $1.48 billion.
As at June 30, cash and bank balances stood at $16.1 billion, mainly due to net cash generated from operations including the proceeds from forward sales.
In addition to the cash on hand, the group retains access to $2.2 billion of committed lines of credit, all of which remain undrawn.
For more stories about where money flows, click here for Capital Section
Looking ahead, SIA expects its group capacity to go up to around 68% of its pre-pandemic levels in the 2QFY2022/2023 and around 76% by the 3QFY2022/2023.
The group adds that it will keep a “tight rein on costs” amid inflationary pressures, interest rate hikes and slowing economic growth in many countries around the world.
Shares in SIA closed 1 cent higher or 0.19% up at $5.36 on July 28.
