SIA highlights sector ‘uncertainties’ despite record annual profit

Geopolitical and macroeconomic uncertainties together high cost inflation could pose challenges for the airline industry in the months ahead, Singapore Airlines Group has cautioned.

Fuel prices also remain at “elevated levels” despite moderating in recent months.

The Asian airline group also pointed to increased competition with more capacity being injected on international routes.

“The group will monitor developments closely, and be agile and nimble in its response,” SIA added.

The comments came as the company reported a record operating profit of S$2.7 billion, reversing a S$610 million loss in the 2021-22 financial year. 

The operating profit for SIA S$2.6 billion and low cost sister carrier Scoot at S$148 million as they both recorded strong post-pandemic recovery.

The group said it acted “swiftly and decisively” to shore up liquidity and build its financial resilience at the onset of Covid-19 in 2020.

“As a result, when the demand for air travel surged in 2022-23 after Singapore fully reopened its borders in April 2022, and as restrictions on international air travel eased globally, SIA and Scoot could ramp up operations at short notice. 

“Working collaboratively with key members of Singapore’s aviation ecosystem, both carriers were among the first to launch flights as borders reopened, and captured the pent-up demand as air travel returned.”

The company added: “Despite the pandemic, the group remained committed to its longstanding strategy of buying and operating new generation aircraft. This enables it to drive further operating efficiencies and support ongoing efforts to materially lower carbon emissions. 

“The group also continued investing in industry-leading products and services to strengthen its premium branding. This included the retrofit of its Airbus A380 and Boeing 737-8 aircraft, the revamp of its flagship lounges at Singapore Changi airport Terminal 3, and an order for the all-new Airbus A350F freighters.

“To prepare for the future, several strategic initiatives were undertaken, including the continued expansion of its network through deeper collaboration with like-minded airlines, the proposed merger of Air India and Vistara to bolster SIA’s presence in the fast-growing Indian aviation market, as well as Scoot’s decision to lease nine Embraer E190-E2 aircraft and expand its footprint to secondary points in the region.”

The group yesterday cited “robust” leisure demand during the Easter holidays for strong passenger growth last month.