SINGAPORE - A sharp recovery in travel demand after border reopenings in April saw Singapore Airlines (SIA) Group's financial numbers take off in the first quarter.
The group, which comprises SIA and Scoot, flew 5.1 million passengers in the three months to June 30 and posted record first-quarter operating profits.
Net profit for the quarter came in at $370 million, versus a $210 million loss in the previous three months and red ink to the tune of $407 million in the same period last year.
The group posted operating profit of $556 million, the second highest quarterly operating profit in its history and a $623 million improvement from the $67 million loss it posted in the previous quarter.
This was also far better - by $830 million - than the previous year's operating loss of $274 million, noted the results out on Thursday (July 28).
All this came on the back of a 58 per cent quarter-on-quarter surge in revenue to $3.91 billion - a sharp improvement from the $2.47 billion recorded in the three months to March 31. The first-quarter topline was also triple the $1.3 billion in revenue SIA posted during the April-June 2021 period.
Revenue from flying passengers rose $1.46 billion, a 119 per cent quarter-on-quarter surge from $2.68 billion on the back of a 127 per cent growth in traffic.
Passenger load factor rose 79 per cent, the highest since the onset of the Covid-19 pandemic, as traffic growth outpaced the capacity expansion of 28.9 per cent.
But cargo flown revenue slipped 1.5 per cent to $1.1 billion as the demand for air freight dropped due to pandemic-related lockdowns in China. The decline in cargo loads was mitigated by higher yields amid capacity constraints on key lanes, especially between Asia and Europe.
Passenger traffic and load factors were robust across all cabin classes and travel segments, as well as all regions except East Asia, where border restrictions remain in certain markets.
With more planes flying, fuel costs rose too.
Net fuel cost rose to $1.27 billion, mainly due to the 40 per cent increase in fuel prices and higher volumes uplifted. But this was partially offset by higher fuel hedging gains.
The airline group's balance sheet improved during the quarter.
Shareholder equity was $22.9 billion as at June 30, an increase of $0.5 billion from March 31.
Cash and bank balances rose by $2.3 billion to $16.1 billion, mainly due to net cash generated from operations, including the proceeds from forward sales. As total debt balances remained at $15.7 billion, the group's debt-equity ratio fell from 0.7 times to 0.68 times.
The group recorded an operating cash surplus of $1.48 billion for the three months, a quarter-on-quarter improvement of $978 million.
In addition to the cash on hand, SIA retains access to $2.2 billion of committed lines of credit, all of which remain undrawn.
The group projects capacity to rise to around 68 per cent of pre-pandemic levels during the current second quarter, and further to around 76 per cent by the third quarter.
"Travel demand is expected to remain robust in the near term as we head into the year-end holiday travel period, with forward sales staying buoyant for the next three months," the company said in a statement accompanying its results.
SIA's operating fleet comprised 127 passenger aircraft and seven freighters as at June 30, while Scoot had 55 passenger aircraft.
SIA shares closed 0.2 per cent higher at $5.36 on Thursday.