SINGAPORE, 28 February 2022: Singapore Airlines Group posted a quarterly profit for the first time since the onset of the pandemic recording a Q3 net profit of SGD85 million.
It came amid a significant step-up in air travel to and through Singapore in the October- December 2021 period, as well as continued robust demand and strong yields in the cargo market.
Singapore’s launch of Vaccinated Travel Lane (VTL) arrangements and its subsequent expansion, as well as the group’s response that resulted in it being the first to open sales on almost all available routes, helped unlock pent-up demand during the year-end travel season.
The group carried 1.1 million passengers during Q3 (October to December 2021). It was more than five times the number from a year before and doubled that of the second quarter of FY2021/22. Passenger capacity (measured in available seat-kilometres) grew 183.8% year-on-year as the group ramped up flights in response to the VTLs. By the end of the quarter, group passenger capacity reached 45% of pre-Covid-19 levels.
Improvements in passenger and cargo revenue resulted in the Group revenue rising SGD1,249 million (+117.1%) year-on-year to SGD2,316 million. Passenger revenue increased by SGD650 million (+355.2%) to SGD833 million, on the back of a 556.8% growth in traffic (revenue passenger kilometres) that outpaced capacity expansion, resulting in the passenger load factor rising 18.9 percentage points to 33.2%. Cargo revenue rose by SGD607 million (+81.6%) to SGD1,351 million, surpassing the SGD1 billion mark for the first time and setting yet another new quarterly record. Robust demand during the traditional cargo peak period was buoyed by retail inventory restocking and strong e-commerce traffic. Cargo yields rose significantly (+26.9%) amid an ongoing industry capacity crunch.
The expansion of operations resulted in group expenditure growing SGD842 million (+60.2%) year-on-year to SGD2,240 million. This increase consisted of a SGD359 million increase (+131.0%) in net fuel costs, a SGD331 million increase (+26.0%) in non-fuel expenditure, and SGD152 million from the year-on-year impact of the fuel hedging ineffectiveness recorded last year and fair value changes on fuel derivatives. Net fuel cost rose to SGD633 million, mainly on higher fuel prices (+SGD330 million) and an increase in volume uplifted (+SGD173 million), which was partially offset by a swing from a fuel hedging loss to a gain (-SGD144 million). The increase in non-fuel expenditure by 26.0% was well within the 183.8% increase in passenger capacity and the 49.2% increase in cargo capacity.
As a result, the group recorded an operating profit of SGD76 million for the three months ended December 2021, versus a SGD331 million loss from a year before (+SGD407 million).