SINGAPORE Airlines (SIA) reported a net profit of S$451.7 million in the first quarter, a 38.5 per cent drop from S$734 million in the year-ago period.
Weaker operating performance, a reduction in net interest income, lower surplus on disposal of aircrafts and spare engines, and a lower share of profit from its associated companies contributed to the decline in net profit, the group said on Wednesday (Jul 31).
Revenue rose 5.3 per cent year on year to S$4.7 billion in the three months ended Jun 30, SIA said. Passenger flown revenue grew 4.1 per cent to S$3.8 billion, supported by a 13.8 per cent increase in passengers carried and strong load factors.
Cargo flown revenue was marginally lower than a year before, declining 0.2 per cent to S$541 million.
“Overall air cargo demand remained buoyant, supported by strong e-commerce flows and increased demand for air freight driven by the Red Sea crisis and port congestion,” SIA said.
Group expenditure was up 14 per cent at S$4.2 billion. Fuel expenditure rose 30.1 per cent to S$1.4 billion, while non-fuel expenditure increased 7.7 per cent to S$2.9 billion.
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As at Jun 30, the group’s operating fleet comprised 202 passenger and freighter aircraft with an average age of seven years and four months.
During the quarter, SIA commenced flights to Brussels and the Gatwick airport in London. Scoot began operating flights with its new aircraft, the Embraer E190-E2, to Koh Samui in May and Sibu, Malaysia in June.
In June, SIA announced plans to launch daily flights between Singapore and the Beijing Daxing International Airport from Nov 11, pending regulatory approval. The carrier will also increase its frequency to Beijing Capital International Airport to 21 weekly services from August.
Earnings per share stood at 12.8 Singapore cents, down from 14.3 cents in Q1 last year.
“Demand for travel remained robust in the first quarter and is expected to stay healthy in the upcoming months,” SIA said. The group will remain nimble and agile and seize growth opportunities that may arise, it added.
However, passenger yields are expected to stay below the previous year’s levels as more capacity enters the market, particularly in the Asia-Pacific region. “The global airline industry continues to face challenges from increased competition, supply chain constraints, inflationary pressures on operating costs including from airports and service providers, and geopolitical uncertainties,” SIA added.
Shares of SIA closed S$0.06 or 0.9 per cent higher at S$6.97 on Wednesday, before the announcement.
