Singapore Airlines Group saw a “strong” performance in its fiscal third quarter but notes that passenger yields are being pressured by the return of capacity around the world.
Reporting its earnings for the October-December 2023 quarter on 20 February, the group said air-travel demand was “robust” during the period, “led by a rebound in North Asia as China, Hong Kong… Japan, and Taiwan fully reopened”.
That helped it to increase revenue by 5% year on year, to S$5.1 billion – the first time the group’s quarterly revenue has passed the S$5 billion mark.
SIA Group’s operating profit was down 19% from the same three months of 2022 at $609 million, while its quarterly net profit of S$659 million was up 5%.
Passenger yields were down 7.4% from the much-more-capacity-constrained final three months of 2022, while cargo yields were 37% lower year on year, echoing global trends. Cargo yields remained 32% above 2019 levels, however, the group notes.
Group passenger capacity during the quarter was around 8% down on pre-Covid levels, but it expects to return to 2019 capacity levels within the next fiscal year.
In its outlook, SIA Group says passenger yields “continue to come under pressure from increased competition as capacity restoration continues across the industry”.
It also cites “heightened” geopolitical tensions, economic uncertainty, high fuel costs, inflationary pressures and supply-chain constraints as industry headwinds.
