The SIA Group said it posted record operating profits in the first half and second quarter of FY2022/23, as the demand for air travel surged after Singapore fully reopened to vaccinated travellers in April 2022, and border restrictions eased across many key markets.
SIA and its low-cost unit Scoot carried 11.4 million passengers during the six months to 30 September 2022, a 13-fold jump from a year before. Passenger traffic and load factors were robust across all cabin classes and route regions, except in East Asia where border restrictions largely remained in place during the six months. The group’s passenger capacity rose to an average of 68% of pre-pandemic levels in the second quarter of FY2022/23.
During the first half, passenger flown revenue rose $522 million (+694%) year-on-year to $597 million. Traffic was 11-fold higher, significantly outpacing the capacity expansion of 118.7%. Consequently, passenger load factor rose 66.8 percentage points to 83.0%. Cargo flown revenue grew by $224 million (+11.9%) to $209 million, supported by higher yields (+18.6%), despite the decline in cargo loads (-5.6%). As a result, group revenue rose $558 million (+197.7%) to $841 million.
Expenditure increased by $3,735 million (+108.4%) year-on-year to $7,182 million. This consisted of a $1,886 million jump (+232.8%) in net fuel cost, a $1,770 million increase (+65.2%) in non-fuel expenditure, and the absence of the $79 million gain that was recorded last year for fair value changes on fuel derivatives. Net fuel cost rose to $2,696 million, mainly on the 93% increase in fuel prices (+$1,467 million) and higher volume uplifted (+$708 million), partially offset by higher fuel hedging gains (-$365 million). The increase in non-fuel expenditure was lower than the increase in passenger capacity.
The group posted a first half net profit of $927 million, versus a $837 million loss in the previous year (+$1,764 million). This was due to the better operating performance (+$1,854 million), lower net finance charges (+$69 million) and improvement in share of results of joint venture and associated companies (+$46 million), partially offset by a tax expense versus a tax credit last year (-$267 million).
During the second quarter, SIA added two Airbus A350-900 wide-body aircraft to its operating fleet. In addition, two Boeing 737-8 narrow-body aircraft joined the operating fleet after undergoing a cabin retrofit post-delivery. SIA’s operating fleet comprised 131 passenger aircraft and seven freighters as of 30 September 2022, while Scoot had 55 passenger aircraft in its operating fleet. With an average age of six years and four months, the Group operates one of the youngest and most fuel-efficient fleets in the airline industry. This supports the group’s decarbonisation goals, as operating a young fleet of modern aircraft is the most effective and direct way for an airline to materially lower carbon emissions in the near term.
During the second quarter, SIA and Scoot reinstated services to several destinations in East Asia, including twice-weekly Beijing-Singapore services and weekly services to Shenzhen. Scoot resumed weekly flights to Fuzhou and five times weekly flights to Osaka, and increased flight frequencies to Nanjing to twice weekly. As of 30 September 2022, the Group’s passenger network covered 100 destinations in 36 countries and territories. SIA served 74 destinations7, Scoot served 48 destinations, and the cargo network comprised 107 destinations.
With the further easing of border restrictions in key markets in East Asia, the SIA Group has stepped up services to meet the strong travel demand towards the year-end holiday season. In October 2022, SIA resumed flights to Chengdu and Xiamen, while Scoot re-introduced flights to several points in mainland China (Hangzhou, Wuhan, and Zhengzhou) and Indonesia (Lombok, Makassar, Pekanbaru, and Yogyakarta). Both airlines will also mount additional flight frequencies to Fukuoka, Hong Kong, Jeju, Osaka, Seoul, Shenzhen, Taipei, Tianjin, and Tokyo. Scoot will resume scheduled flights to Hokkaido (Sapporo) via Taipei from November 2022, as well as direct seasonal flights to Hokkaido (Sapporo) until February 2023. The low-cost carrier will also commence seasonal services to Kuantan from November 2022 to February 2023.
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