LanguagesOverview of Financial Performance in Q3 FY2024
Singapore Airlines Group has showcased a commendable financial performance in the third quarter of the fiscal year 2024, ending December 31, 2023. The group reported a net profit of SGD659 million ($491 million), marking a 4.9% increase from SGD628 million ($468 million) in the same period of the previous year. This growth is attributed to the robust passenger demand experienced with the reopening of North Asian markets, including China, Hong Kong, Japan, and Taiwan. The reported earnings per share (EPS) stood at SGD0.16 ($0.12), an improvement from the previous year’s SGD0.103 ($0.07).
Revenue Growth and Passenger Demand
Revenue for Q3 FY2024 saw an increase of 4.9%, rising from SGD4.8 billion ($3.6 billion) in the corresponding quarter of the previous year to SGD5.1 billion ($3.8 billion). This milestone marks the first instance in the group’s history where quarterly revenue surpassed the SGD5 billion ($3.73 billion) threshold. The surge in revenue is primarily driven by a 10.6% increase in passenger flown revenue, reaching SGD4.2 billion ($3.13 billion), despite a 7.4% decrease in passenger yields. This trend underscores the high demand for air travel, particularly led by leisure travel during school holidays and the Easter peak in March and April 2024.
Market Conditions and Strategic Responses
The Singapore Airlines Group remains optimistic about the demand for air travel remaining healthy through the final quarter of FY2024 and into Q1 of 2025. However, the airline also cautions about the challenges ahead, including heightened geopolitical tensions, economic uncertainties, and inflationary pressures that could impact business sentiment and demand for air travel. The airline also highlights the challenge of high fuel prices and supply chain constraints that present a challenging operating cost environment globally. Furthermore, air freight volume is anticipated to soften in the seasonally weaker January to March quarter, with continued pressure on yields due to the increase in passenger aircraft belly hold capacity.
Fleet Expansion and Route Development
As of December 31, 2023, the Singapore Airline Group’s operating fleet comprised 202 passenger and freighter aircraft, boasting an average age of seven years and one month. The addition of three Boeing 787-10s in Q3 has expanded the operating fleet to 143 passenger aircraft and seven freighters. Budget sister airline Scoot operates 52 passenger aircraft and is set to receive its first Embraer E190-E2 aircraft in April 2024. With 92 aircraft on order, the group is poised for significant expansion. For the Northern summer 2024 operating season (March 31 to October 26, 2024), Singapore Airlines will increase its services to Fukuoka (FUK) and Nagoya (NGO) from five times weekly to daily. Additionally, the carrier plans to introduce four-times weekly direct flights to Milan (LIN) and launch five-times weekly direct flights between Singapore (SIN) and London-Gatwick Airport (LGW) in June 2024, pending regulatory approvals. The group is on track to return to pre-pandemic capacity levels within its 2024/25 financial year commencing April 1, 2024.