Singapore Airlines reported that in October the group expanded its Vaccinated Travel Lane (VTL) network to include Denmark, France, Italy, the Netherlands, Spain, the United Kingdom and the United States of America, in addition to Brunei and Germany. This enabled a meaningful resumption of travel between Singapore and these countries, and consequently led to an increase in passenger carriage on these routes.
During the month, the SIA Group’s passenger capacity (measured in available seat-kilometres) grew 6 percent month-on-month, reaching 34 percent of pre-Covid-19 levels. Passenger traffic (revenue passenger-kilometres) grew 13.9 percent compared to the previous month. Group passenger load factor (PLF) for October 2021 increased 4.1 percentage points year-on-year to 19.9 percent. On a month-on-month basis, the PLF improved by 1.4 percentage points contributed by stronger demand to Europe and the Americas due to the VTLs.
Cargo operations registered a monthly cargo load factor (CLF) of 87.2 percent, up 1.7 percentage points year-on-year as loads (freight tonne-kilometres) rose by 58.1 percent on the back of a 55.0 percent capacity (capacity tonne-kilometres) expansion. The East Asia and Americas route regions recorded year-on-year increases in CLF during the month.
At the end of October 2021, the SIA Group’s passenger network covered 66 destinations including Singapore. The Singapore Airlines full-service network served 521 destinations, while Scoot, SIA’s low-cost carrier subsidiary, served 261 destinations as at end of October. During the month, Scoot re-launched flights to Phuket and resumed operations to the West Asia with the commencement of services to Jeddah.
The group also said its low-cost carrier Scoot will launch a new long-haul route to London’s Gatwick Airport (via Bangkok), with three-time weekly services commencing in March 2022, subject to regulatory approval. To cater to the year-end peak, Scoot will also operate some seasonal flights to Gatwick from 16 to 28 December 2021. London will be Scoot’s third destination in Europe, after Athens in Greece and Berlin in Germany. On the VTL front, the group’s VTL network will also include Australia, South Korea and Switzerland by November 2021. Canada will be added to the network when the seasonal Singapore-Seattle-Vancouver services commence from 2 December 2021. In addition, the group is finalising flight schedules between Kuala Lumpur and Singapore. With these inclusions, the SIA group’s VTL network will consist of 21 cities from 14 countries.
International air travel continued to recover during the first half of FY2021/22, on the back of rising global COVID-19 vaccination rates and as travel corridors – including Singapore’s Vaccinated Travel Lane (VTL) arrangement – came into effect. The Singapore Airlines (SIA) Group’s passenger traffic (measured in revenue passenger-kilometres) grew five-fold year-on-year, with passenger capacity (available seat-kilometres) also growing five-fold year-on-year to reach 32 percent of pre-Covid-19 levels as of September 2021.
Group revenue rose $1.193 billion (+73.0 percent) year-on-year to $2.827 billion, attributable to improvements in both the passenger and cargo segments. Passenger flown revenue grew by $598 million (+385.8 percent) on the back of the recovery in traffic, partly offset by weaker yields. Cargo flown revenue reached a record high of $1.875 billion (+$635 million or +51.2 percent) with the progressive resumption of passenger flights contributing to the increase in cargo capacity (+49.5 percent) and loads carried (+61.6 percent). The strong cargo performance reflects the capacity crunch in both air freight and ocean freight, and ongoing supply chain disruptions driving air freight demand.
Group expenditure fell $51 million (-1.5 percent) to $3.446 billion. This was mainly due to the absence of the fuel hedging ineffectiveness that was recorded last year, and the swing from fair value loss to gain on fuel derivatives arising from the rise in fuel prices during the first half of the year. This was mostly offset by net fuel costs which rose $434 million (+115.4 percent) to $810 million, mainly due to higher fuel prices and an increase in volume uplifted to support the expansion in passenger operations. Non-fuel expenditure also rose by $157 million (+6.1 percent) to $2,715 million, as higher costs were incurred from increased flying activities.
As a result, the SIA Group recorded an operating loss of $619 million for the first half, an improvement of $1.244 billion (+66.8 percent) from the $1.863 million operating loss in the previous year. For the half year ended 30 September 2021, the Group reported a net loss of $837 million, an improvement of $2,630 million (+75.9 percent) from the prior year. This was mainly due to better operating performance, and the absence of $1,630 million in non-cash items recorded last year largely from the impairment of aircraft assessed to be surplus to requirements. Net loss for the second quarter of FY2021-22 came in at $428 million, a slight increase of $19 million (+4.6 percent) quarter-on-quarter.
Fleet and network
During the second quarter, six Boeing 737-8 MAX aircraft were transferred from SilkAir into the SIA operating fleet as part of the integration of SilkAir into SIA. This followed the removal of the Civil Aviation Authority of Singapore’s restrictions on the operation of these aircraft. In addition, one A350 aircraft delivered in the first quarter entered the operating fleet in the second quarter. The last Airbus A330 aircraft was removed from the operating fleet for lease return checks. At the end of September 2021, SIA’s operating fleet comprised 121 passenger aircraft2 and seven freighters. Scoot added one more A321neo aircraft into its operating fleet bringing its fleet size to 50 passenger aircraft.
As of 30 September 2021, the Group had an operating fleet of 171 passenger aircraft and seven freighters. At an average age of six years, this is one of the youngest airline fleets in the industry.
During the quarter, SIA resumed passenger services to Cape Town, Kathmandu, Manchester, and Rome. Scoot re-introduced flights to Berlin (via Athens) and Sydney. Medan, Nanjing and Surabaya services were temporarily suspended due to airport closures. At the end of September 2021, SIA served 525 destinations while Scoot covered 245 points. The Group’s passenger network covered 655 destinations, up from 63 compared to the previous quarter. The Group’s cargo network comprised 785 destinations, up from 76 as at the end of the prior quarter.
Singapore took a major step in re-opening its borders and restoring its status as an international air hub on 8 September, when the first VTL services were launched from Brunei and Germany. The VTL arrangements have since been expanded to include Australia, Canada, Denmark, Finland, France, Italy, Malaysia, the Netherlands, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States of America. At present, the SIA Group’s VTL network consists of 21 cities6 from 14 countries.
SIA will resume Airbus A380 operations to London from 18 November 2021 and Sydney from 1 December 2021 to support the increased demand on these routes. SIA will re-instate flights to Houston (via Manchester) on 1 December 2021, and launch a seasonal Singapore-Seattle-Vancouver service from 2 December 2021. Scoot started non-stop services to Berlin on 19 October 2021, and will commence flights to Incheon from 15 November 2021 and Davao from 1 December 2021.
Based on current published schedules, the Group expects passenger capacity to reach 43 percent of pre-Covid levels by December 2021. The Group network will serve just over half of the total pre-Covid points, or 73 destinations including Singapore.
Singapore’s quarantine-free VTL arrangements support the safe and gradual recovery of Changi Airport as a major air hub. Air travel demand is expected to grow as vaccination rates rise, especially in countries within the Asia Pacific region, and as government regulations ease further across key markets.
New interiors for narrowbodies
SIA announced it has launched its new cabin products, which will be rolled out on its Boeing 737-8 fleet in the coming weeks. This elevates the customer experience on board the airline’s narrowbody aircraft fleet to a level similar to its widebody aircraft, offering a consistent and premium travel journey across the entire Singapore Airlines network. All of SIA s 737-8 aircraft will have 154 seats in two classes, 10 in Business Class and 144 in Economy Class, with new cabin products featuring bespoke elements that have been designed especially for the SIA customer.
The lie-flat Business Class seats have been designed by London-based Factorydesign, and manufactured for Singapore Airlines by Thompson Aero Seating. The Economy Class cabin will feature the latest generation sleek and slimline seats, which have been built by Collins Aerospace. The 737-8 cabin has been designed with a special focus on ergonomics, helping to ensure that everything is within easy reach for customers. The aircraft feature Panasonic s X-Series seat-back in-flight entertainment, allowing all customers to enjoy the latest KrisWorld entertainment content. The fleet is also fitted with Panasonic s in-flight Wi-Fi service, as well as mobile data connectivity services.
Singapore Airlines has invested around S$230 million on the development, design, and installation of the new industry-leading cabin products, which elevate the standard for short- and medium-haul travel on board narrowbody aircraft.