SIA soars into the black in Q1 with second highest quarterly operating profit

Benjamin Cher

Published Thu, Jul 28, 2022 · 05:59 PM

SINGAPORE Airlines (SIA) reported a Q1 FY2022 ending June 30 operating profit of S$556 million, reversing into the black on soaring air travel demand. This is SIA’s second highest quarterly operating profit since Q3 FY2007/08.

Earnings for the period likewise reversed into a profit of S$370 million. The Singapore carrier’s group capacity has jumped from a average 47 per cent of pre-pandemic levels in Q4 FY2021/22 to 61 per cent in Q1 FY2022/23.

Revenue for Q1 FY2022/23 surged 202 per cent y-o-y to S$3.9 billion from S$1.3 billion. This was driven by a 119.3 per cent increase in Q1 FY2022/23 passenger flown revenue to S$2.8 billion from S$1.5 billion. Cargo flown revenue in Q1 FY2022/23 dipped 1.5 per cent or S$17 million to S$1.1 billion as demand from air freight falls due to pandemic-related lockdowns in China. However this was offset by higher yields due to capacity constraints on key lanes between Asia and Europe.

SIA is forecasting group capacity to hit about 68 per cent of pre-pandemic levels in Q2 FY2022/23 and to 76 per cent by Q3 FY2022/23. The carrier is expecting travel demand to remain robust heading into the year-end holiday travel period, as forward sales remains buoyant for the next 3 months till October.

Cargo yields are expected to remain higher than pre-covid level even as cargo demand is being offset by seasonally slower air cargo activity during the summer. Air cargo capacity remains tight on key trade lanes between Asia and Europe as well.

Inflationary pressures and elevated fuel prices remain a concern, and interest rate hikes and slowing economic growth are risks to passenger travel recovery and air cargo demand, that SIA is monitoring.