SINGAPORE - The latest blockbuster results achieved by Singapore Airlines (SIA) were largely due to the group’s ability to put in place the right resources to enable operations to take off when the Covid-19 pandemic ended, said its chief executive Goh Choon Phong.

”It was our ability to be first off the block when borders reopened,” Mr Goh told analysts and reporters at a post-results conference on Wednesday. “The preparatory work we had put in allowed us to add capacity quickly and be in a strong position to capture pent-up travel demand.”

On Tuesday, the airline unveiled record revenue and profit numbers for the current financial year, buoyed by record passenger loads.

Net profit came in at $2.16 billion for the full year ended March 31, rebounding from a loss of $962 million a year earlier.

Operating profit soared to $2.69 billion, erasing a loss of $610 million a year earlier. This came on the back of record revenue of $17.78 billion, a 133 per cent surge from 2022’s $7.62 billion.

Mr Goh said that as early as 2020, when the pandemic was in full swing and borders were shuttered and SIA had to ground most of its fleet, the airline was already planning for a recovery when the crisis passed.

Key measures included shoring up finances, including raising $15 billion via mandatory convertible bonds (MCBs) as early as March 2020. The group has managed to raise some $23.58 billion in liquidity since April 2020.

Other measures included reducing discretionary expenditure, renegotiating contracts with suppliers and contractors, freezing hiring, cutting salaries and revising aircraft delivery schedules – thus deferring $4 billion in near-term capital expenditures. But training and upskilling of staff continued.

As a result, when the borders reopened, SIA had the financial, manpower and operational resources to get planes off the ground faster and more efficiently than its rivals, Mr Goh explained.

The group’s passenger load factor (PLF) jumped 55.3 percentage points to 85.4 per cent, the highest in its history. PLF represents the percentage of available seats on a flight that are filled by passengers.

SIA achieved a record PLF of 85.8 per cent, while Scoot delivered a PLF of 83.9 per cent.

The group’s passenger capacity reached 79 per cent of pre-Covid-19 levels in March, higher than the average of 58 per cent in the Asia-Pacific region. It is projected to reach an average of around 83 per cent of pre-Covid-19 levels in the first half of financial year 2023-2024.

The group’s balance sheet is now much stronger.

A week ago, it announced plans to redeem half of its MCBs that were issued in June 2021. This came barely six months after the airline group announced the full redemption of its 2020 MCBs.

Net cash generated from operations, including proceeds from forward sales, contributed $9.1 billion, while the group paid $3.9 billion for the redemption of the 2020 MCBs. Cash and bank balances saw an increase of $2.5 billion year on year to $16.3 billion.

The group also retained access to $2.2 billion of committed lines of credit, all of which remain undrawn.

SIA announced plans to pay a final dividend of 28 cents per share for the 2022-2023 financial year. Including the interim dividend of 10 cents per share paid in December 2022, the total dividend will be 38 cents per share.

The Straits Times understands that the company is also paying its staff a bonus amounting to six months of their salary.

Going forward, Mr Goh and his team see a “normalisation” of demand as rival airlines add capacity.

Other challenges include unpredictable fuel costs and an uncertain macroeconomic outlook.

Cargo demand, which was the star performer during the pandemic as SIA planes transported vaccines, food and other essentials amid a crunch in the global supply chain, now shows signs of slowing.

The company is also adjusting to new market developments.

In February, the group announced the purchase of nine Embraer 112-seater regional jets for its budget carrier Scoot. The move was seen as unusual for an airline that had previously insisted that it would stick to Boeing and Airbus jets to avoid adding cost and complexity to its operations.

Mr Goh said the decision to buy the regional jets arose after a review of changing market conditions.

Mr Leslie Thng, CEO of Scoot, added that the South-east Asian region is presenting more market opportunities for the budget carrier, and hence it needs smaller and more versatile jets capable of serving new emerging markets within a five-hour flight radius of Singapore.

Separately, Mr Thng said that none of the airline’s Airbus A320neo planes with Pratt & Whitney engines are grounded. This comes after Indian airline Go First said in its bankruptcy filing earlier this week that about half its fleet was grounded due to Pratt & Whitney engine issues.