SIA Balance Sheet in Turbulence

Singapore Airlines group reports a 48.8% drop in profits during the H1 this fiscal as compared to the last year.
SINGAPORE, Nov 8 (The CONNECT) – Singapore Airlines group has recorded an operating profit of $796 million in the first half of FY2024/25, down $758 million (-48.8%) from the previous year.
The Group posted a net profit of $742 million, $699 million less than the previous year (-48.5%), primarily due to the weaker operating performance.
Other contributing factors included lower net interest income and a loss on disposal of aircraft, spares, and spare engines versus a gain last year. However, relative to last year, share of profits from associated companies was higher and tax expense was lower.
The demand for air travel remained healthy in the first six months of FY2024/25, with SIA and Scoot carrying 19.2 million passengers, a 10.8% year-on-year increase. However, passenger traffic growth of 7.9% trailed the SIA Group’s passenger capacity expansion of 11.0%, resulting in a 2.4 percentage point decline in Group passenger load factor (PLF) to 86.4%. SIA and Scoot achieved PLFs of 85.7% and 88.6% respectively, SIA admitted.
Strong e-commerce flows and ongoing disruptions to sea freight bolstered the air freight segment. SIA said, the cargo load factor increased by 4.7 percentage points to 57.4% as the 20.0% rise in loads outpaced the 10.2% increase in capacity, reflecting the strong demand in this sector.
Group revenue rose $335 million (+3.7%) to $9,497 million, with passenger flown revenue up $118 million and cargo flown revenue higher by $42 million. Increased competition and higher passenger capacity in key markets exerted pressure on yields, which fell 5.6%. On the cargo front, yield was 13.4% lower amid the continued recovery in bellyhold capacity.
Expenditure rose $1,093 million (+14.4%) to $8,702 million, driven by a $447 million increase (+19.6%) in net fuel cost and a $646 million rise (+12.1%) in
non-fuel expenditure.
Net fuel cost reached $2,730 million due to the higher volume uplifted (+$274 million) and lower fuel hedging gain (+$176 million), slightly offset by a 0.4% fall in fuel prices (-$10 million). Despite the impact of general price inflation, the Group kept the rise in non-fuel costs to be largely in line with the 10.6% growth in overall capacity, thanks to its operational efficiency initiatives.