Singapore Airlines Group reported a drop in its first-quarter operating profit – its first decline recorded post-pandemic – as it was impacted by falling yields and a rise in fuel costs.
For the three months ended 30 June, the airline group – comprising mainline carrier SIA and low-cost operator Scoot – recorded an operating profit of S$470 million ($351 million), down almost 38% year on year.
SIA Group saw revenue go up 5.3% year on year to S$4.7 billion. Passenger revenue rose 4% year on year as both airlines carried 13.8% more passengers during the quarter. This helped offset a 4.6% decline in yields, the group notes.
Quarterly expenses stood at S$4.2 billion, 14% higher compared to the year-ago period. SIA Group reported a 30% jump in fuel costs, as a result of more fuel uplifted, an increase in fuel prices and a lower fuel hedging gain.
While SIA Group expects passenger demand to “stay healthy” in the near-term, it reiterates its warning that yields will continue to stay below the previous year’s levels, as more capacity enters the market.
“The SIA Group remains well-positioned to navigate these headwinds, supported by its strong balance sheet and robust digital capabilities, the long-term strategic initiatives, the three brand pillars of service excellence, network connectivity, and product leadership, as well as its firm commitment to maintaining cost discipline,” it states.
