It’s just a S$76 million operating profit, but Singapore Airlines produced its first profit since the start of the pandemic in 2020. In the third quarter of FY21/22, the airline benefitted from more passenger traffic on its vaccinated travel lanes (VTL) as well as record cargo revenues, it reported on February 24. VTL routes save Singapore Airlines’ third quarter.
Full-service carriers Singapore Airlines and Silk Air carried 966.000 passengers, low-cost subsidiary Scoot 122.000. That makes 1.1 million, up from 195.000 in the same quarter of last year. The big differentiator has been the 31 VTL destinations in Australia, Europe, North America, India, South Korea, and Southeast Asia. “Singapore’s VTL arrangements have been a game changer for the SIA Group, facilitating quarantine-free mass travel for the first time since the pandemic began”, it says in a media statement.
SIA’s network grew to 63 destinations plus 35 for Scoot, including London Gatwick (via Bangkok), Davao, and Jeddah. Total passenger capacity reached 45 percent of 2019 levels in December.
Revenues increased to $2.316 billion compared to $1.067 billion in Q1 FY20/21, of which $833 million from passengers and $1.351 billion from cargo. This is the first time that quarterly cargo revenues surpassed one billion. Cargo and mail carried were 285.4 million kilograms, up from 208.6 million, but the airline benefitted from 26.9 percent higher cargo yields as a capacity-restricted market.
Q3 ended with a $76 million operating profit compared to a $331 million loss last year, or a net profit of $85 million versus $-142 million in FY20/21. As Singapore Airlines re-activated more aircraft and crew, its expenditures grew to $2.2 billion. Fuel costs were up to $689 million from $186 million, offset by a gain on fuel hedging of $56 million. In Q2, Singapore reported a $345 million loss.
Nine-month loss of 543 million
For April to December, the Group recorded a $543 million operating loss compared to $-2.194 billion in FY20/21. The net loss for the period was $752 million versus $-3.609 billion. Revenues were $5.143 billion compared to $2.701 billion. Cash flow was $322 million. By the end of December, Singapore Airlines had $22.1 billion in liquidity available and since then has secured a US$600 million seven-year bond. Net debt was $14.9 billion, up by $0.6 million as lease liabilities increased.
Singapore Airlines and Silk Air fleet shows 121 passenger aircraft plus seven freighters. It re-activated seven of its twelve Airbus A380s, which currently fly to Sydney and London but which later this spring will return on the routes to Delhi and Mumbai and to New York via Frankfurt. SIA took delivery of one A350 and four Boeing MAX 8s. Scoot’s fleet comprised of fifty passenger aircraft, including two new A321neo’s.
SIA expects to ramp up its capacity to 51 percent in March, with an average capacity in Q4 of 47 percent. It expects demand on VTL routes to continue to recover, but passenger and cargo traffic should moderate this Q4 after the year-end holiday season. Omicron is another factor that has impacted demand, but as the effects of this variant seemed less severe than those of Delta, key markets for SIA have relaxed restrictions that should help its recovery.
This summer, SIA will return to New York Newark to offer a third service into New York, with London returning to four daily services and Cairns and Darwin to be reinstated as well. The service to Seattle via Vancouver will be extended beyond the winter season. Newark, Cairns, and Darwin are part of the expanding VTL network that will also include Dubai, Hong Kong, Manila, and Phuket. VTL routes save Singapore Airlines’ third quarter, maybe they will do the same in Q4.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.