Singapore Airlines Group saw its operating and net profits tumble for the first quarter of fiscal 2025 – despite passenger numbers hitting a new high – as it warns of an increasingly “challenging operating environment”.
The airline group, which comprises mainline operator SIA and low-cost brand Scoot, saw its operating profit fall nearly 14% to S$405 million ($315.3 million) for the three months ended 30 June.
This comes amid a steady rise in operating costs during the quarter: SIA Group’s quarterly expenses were up 3.2% to S$4.4 billion, outpacing a 1.5% rise in revenues to S$4.8 billion.
The cost increase was led by a rise in non-fuel expenses, in line with an increase in capacity, but exacerbated by “inflationary pressures on key cost elements”, SIA Group states.
The two airlines carried 6.9% more passengers during the quarter, bringing passenger volumes to an all-time high of 10.3 million. Traffic grew by 4.3%, while capacity increased 3.3%, leading to a 0.7-point increase in passenger load factor to 87.6%.
Nonetheless, the group says yields continue to decline, falling about 2.9% year on year, amid “heightened competition”.
Cargo yields also fell during the quarter, down 4.4%, coupled with tepid cargo load growth, at around 2.8%. SIA Group notes its cargo revenue fell 1.9% as a result.
The group posted a net profit of S$186 million – its lowest first-quarter net profit in three years, according to Airline Business data – down 59% year on year. SIA Group attributes the decrease to lower interest income from lower cash balances and interest rate cuts, as well as losses of its associated companies.
It singles out Air India’s losses, noting that the financial results of the carrier, of which it owns 25.1%, were not included in its results in the year-ago period.
Nonetheless, SIA Group says it remains “committed” to its “participation in India’s large and rapidly growing aviation market” through the Air India shareholding.
The group’s current fleet as at end-June stood at 204 aircraft: mainline operator SIA with 151 aircraft and Scoot with 53 jets. It also has 72 aircraft on order.
