SIA Group’s net profit soars to 659 million USD

Tuesday, February 20, 2024

The Singapore Airlines (SIA) Group has experienced a surge in passenger demand, propelling quarterly revenue to a record $5,082 million. This robust demand also contributed to record operating and net profits for the nine months leading up to December 2023.

However, the global restoration of flight capacities has intensified competition, putting pressure on passenger yields. The airline industry faces potential headwinds from geopolitical tensions, macroeconomic uncertainties, inflationary pressures, and supply chain constraints. These challenges underscore the need for strategic navigation and operational efficiency to sustain growth and profitability in the evolving market landscape.

The Singapore Airlines (SIA) Group has reported a strong third-quarter performance for the period ending 31 December 2023, with net profits soaring to $659 million. This remarkable growth is attributed to the continued demand for air travel, particularly noticeable with the full reopening of North Asia, including China, Hong Kong SAR, Japan, and Taiwan. The Group, encompassing SIA and Scoot, witnessed a 29.4% year-on-year increase in passengers, carrying 9.5 million travelers and seeing a 19.1% rise in passenger traffic.

Record-Breaking Revenue

A significant milestone was achieved with quarterly revenue reaching a record $5,082 million, a 4.9% increase year-on-year, surpassing the $5,000 million mark for the first time in the Singapore Airlines (SIA) Group ’s history. This boost was primarily driven by a $398 million rise in passenger flown revenue. Despite a decline in cargo flown revenue, the Group maintained yields significantly above pre-pandemic levels.

Operational Expenditures and Profit

Operational expenditures rose to $4,473 million, marking a 9.3% increase, largely due to higher net fuel costs and non-fuel expenditures. Nonetheless, the Singapore Airlines (SIA) Group achieved a commendable operating profit of $609 million, though it represented a decrease from the previous year.

Nine-Month Fiscal Performance

Over the nine months to December 2023, the Singapore Airlines (SIA) Group reported a record revenue of $14,244 million, up 7.4%, bolstered by increased passenger flown revenue. This period also saw a notable operating profit of $2,163 million and a net profit of $2,100 million, marking a 35% year-on-year increase.

Strategic Developments and Future Outlook

The Group’s strategic initiatives include the anticipated merger of Air India and Vistara, advancing SIA’s presence in India. Additionally, SIA and Scoot aim for sustainable aviation fuels to comprise 5% of their total fuel requirements by 2030, aligning with their goal of net zero carbon emissions by 2050.

Despite a positive outlook with robust forward sales, challenges such as competitive pressures, geopolitical tensions, and economic uncertainties may impact passenger yields and operational costs. The Singapore Airlines (SIA) Group plans to continue its focus on capacity matching, cost discipline, and leveraging digital technologies to navigate these challenges effectively, aiming to return to pre-pandemic capacity levels within FY2024/25.

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