The Singapore Airlines (SIA) Group posted a quarterly profit for the first time since the onset of the pandemic, recording Q3FY22 net profit of $85 million.
This came amid a significant step-up in air travel to and through Singapore in the October-December 2021 period, as well as continued robust demand and strong yields in the cargo market.
Singapore’s launch of Vaccinated Travel Lane (VTL) arrangements and its subsequent expansion, as well as the Group’s nimble response that resulted in it being the first to open sales on almost all available routes, helped unlock pent-up demand during the year-end travel season.
The Group carried 1.1 million passengers during the quarter, more than five times the number from a year before and double that of the second quarter of FY2021/22. Passenger capacity (measured in available seat-kilometres) grew 183.8% year-on-year, as the Group ramped up flights in response to the VTLs. By the end of the quarter, Group passenger capacity reached 45% of pre-Covid-19 levels.
The expansion of operations resulted in Group expenditure growing $842 million (+60.2%) year-on-year to $2,240 million. This increase consisted of a $359 million increase (+131.0%) in net fuel costs, a $331 million increase (+26.0%) in non-fuel expenditure, and $152 million from the year-on-year impact of the fuel hedging ineffectiveness recorded last year and fair value changes on fuel derivatives. Net fuel cost rose to $633 million, mainly on higher fuel prices (+$330 million) and an increase in volume uplifted (+$173 million), which was partially offset by a swing from a fuel hedging loss to a gain (-$144 million). The increase in non-fuel expenditure by 26.0% was well within the 183.8% increase in passenger capacity and the 49.2% increase in cargo capacity.
As a result, the Group recorded an operating profit of $76 million for the three months ended December 2021, versus a $331 million loss from a year before (+$407 million).
