Singapore Airlines (SIA) has reported higher earnings for the 3QFY2025 of $1.6 billion, up 146.7% y-o-y from the same period a year ago. While certain operating numbers improved, the higher bottom line was predominantly due to the $1.1 billion non-cash accounting gain resulting from the disposal of Vistara, following the airline’s merger with Air India in November 2024.
Revenue in the same period increased 2.7% y-o-y to $5.2 billion.
The group says revenue for the third quarter ended Dec 31, 2024 was spurred by robust demand for air travel. Passenger flown revenue improved by $70 million or 1.7% higher y-o-y with SIA and Scoot carrying a quarterly record of 10.2 million passengers for the third quarter.
For its 9MFY2025, earnings increased by 12.8% y-o-y to $2.4 billion; revenue was up 3.3% y-o-y to $14.7 billion.
Cargo flown revenue also increased for the third quarter with loads up 14.6% y-o-y from robust demand due to strong e-commerce activity, a step up in freighter charters and a boost in perishable traffic.
SIA saw higher non-fuel expenditure for the third quarter, partially offset by the decline in net fuel costs. This decline in net fuel costs was due to a 20.9% drop in fuel prices before hedging, partially offset by the higher volume uplifted and the swing from a fuel hedging gain in the previous year to a loss.
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While there was revenue gain, heightened competition resulted in lower passenger yields and cargo yields y-o-y. Operating expenditure increased 10.0%, in line with the overall capacity expansion of 10.5%, and net fuel cost was up 8.2% from an increase in volume uplifted and lower fuel hedging gain.
This was partially offset by an 8.1% fall in fuel prices. As a result, the operating profit fell $738 million to $1,425 million.
On the group’s balance sheet, as at Dec 31, 2024, SIA’s shareholder equity stood at $15.4 billion, down $1 billion from March 31, 2024 due to redemption of remaining mandatory convertible bonds (MCB) in June 2024.
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Total debt balances remained at $13.3 billion with debt-equity ratio rising from 0.82 times to 0.87 times.
Operations, initiatives and outlook
SIA’s operating fleet comprised 207 passenger and freighter aircraft with average age of seven years and six months. SIA added one Airbus A350-900 in December 2024, giving it 146 passenger aircrafts and seven freighters.
Scoot added three Embraer E190-E2 aircraft in the third quarter, bringing its operating fleet to 54 passenger aircrafts. The group has 81 aircrafts on order.
SIA launched services to Beijing Daxing (China) in November 2024, while Scoot began Embraer E190-E2 operations to Malacca (Malaysia) in October 2024 and Phu Quoc (Vietnam) in December 2024.
As at Dec 31, 2024, the group’s passenger network covered 129 destinations in 36 countries and territories, with SIA serving 80 destinations and Scoot serving 72 destinations. The cargo network reached 133 destinations in 37 countries and territories.
In November 2024, SIA announced a $1.1 billion multi-year programme to install its all-new long-haul cabin products across its Airbus A350-900 long-haul and ultra-long-range fleets. SIA and Tata Sons completed the merger of Air India and Vistara on Nov 12, 2024 giving SIA a 25.1% stake in the Air India Group.
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In 3QFY2024/2025, SIA and Air India added 51 new codeshare destinations from Oct 2024.
SIA says that while the demand for air travel is expected to stay healthy heading into the last quarter of FY2024/25, the operating landscape continues to be competitive.
While e-commerce and perishables traffic are expected to hold up cargo demand, yield moderation is likely to persist as airlines across the industry resume passenger flights and increase their bellyhold cargo capacity, and as shippers move to lock down their space requirements and rates in advance.
As the airline industry faces headwinds such as cost inflation, supply chain constraints, geopolitical tensions, economic uncertainty, and increased competition, SIA says it is well-positioned to navigate these challenges thanks to its robust foundations, which include its strong financial standing, a talented and dedicated workforce, and industry-leading digital capabilities.
Shares in Singapore Airlines closed 1 cent lower or 0.156% down at $6.42 on Feb 20.
