Singapore Airlines checks in 1.7m passengers in May

SINGAPORE Airlines (SIA) is progressing on its recovery runway as the mainboard-listed group in May logged the highest passenger traffic and load factor since the pandemic hit in early 2020.

The national carrier with budget arm Scoot together flew a total of 1.7 million passengers, 17.4 per cent more than that in April, when Singapore dropped most of its border requirements for vaccinated travellers.

In addition, SIA’s passenger load factor hit 78.2 per cent at the group level, the highest since the pandemic began in early 2020, according to its monthly operating statistics released after market closed on Wednesday (Jun 15).

While freight capacity rose 30.2 per cent year-on-year in tandem with more passenger flights, both load factor and load (in terms of the distance the freight transported) dipped, by 22.3 percentage points and 3 per cent respectively.

The lower cargo demand was a result of the pandemic controls in China. Also, SIA noted more bellyhold space went to baggage carriage as passenger load factors improved.

Since the city-state significantly relaxed its border restrictions, SIA has reported increasing passenger traffic. In fact, its forward bookings, a Citi analyst wrote in a note published this week, as a percentage of available capacity for the next three months are near pre-pandemic levels.

Kaseedit Choonnawat, after meeting executives of SIA, also wrote that premium seats on SIA flights filled up faster by corporate flyers from the financial industry, and the executives from Hong Kong are using Singapore as a hub to travel to the region

Also, the analyst reported that the carrier expects both the passenger and freight yields to normalise above pre-pandemic levels in a more consolidated global airline industry, post-pandemic.

In addition, Choonnawat said that the carrier “has ambitions to review its outstanding MCBs (mandatory convertible bonds), which will be discussed in the next 1-2 quarters”. The zero-coupon MCBs worth S$9.7 billion in total issue value with maturity in 2030 were liquidity lifelines for SIA when it was pummelled by the pandemic and navigating the toughest year in its history in 2020.

When queried, SIA said that the carrier has “no definitive plans on SIA’s mandatory convertible bonds that we can disclose at this point”, but confirmed the part about forward bookings.

Added the SIA spokesperson: “However, the rest of the comments in the report are representative of the analyst’s views and assessment based on what has been discussed at different interactions and shared publicly.”

At the closing bell on Wednesday, SIA shares were flat at S$5.13 while the MCBs issued in 2020 inched up 0.2 per cent to S$1.013 and the 2021 tranche was 0.31 per cent lower at S$0.962.