Singapore Airlines

Singapore Airlines Q1 2024/2025 Positive but Margins Down from Prior Year

Singapore Airlines is among the strongest names in commercial aviation. The SIA Group which controls Singapore Airlines, Scoot, and the Cargo division is among the most solid entities in civil aviation. Therefore, we are used to associate to the southeast Asian carrier strong financial results. 2024 Q1 is no exception (Singapore follows the British style quarters with Q1 closing in June). The airline had some solid financial performances, however, there are some KPIs that held results back.

Singapore Airlines Group Turns a Profit in Q1 2024 But Lower Than 2023

There is a lot of positive notes in the Singapore Airlines earnings report for Q1 2024, however, there are also some KPIs that did hold back the SIA group.

The bottom line says that the SIA group (which includes both Singapore Airlines and Scoot) turned a profit in 2024’s Q1. However, despite an increase in overall revenue the profits suffered when comparing them to last year’s Q1.

Total revenue for the airline group was 4.718 billion $ in Q1 2024, up from 4.479 billion $ in the same period of 2023. That would be fine if it also translated to higher profit figures, but that wasn’t the case.

Unfortunately for SIA the group faced a steep increase in operational costs in this opening quarter of the 2024/2025 fiscal year. Total expenditure clocked in at 4.248 billion $ against the prior year’s 3.725 billion $. What pushed costs up the most was the fuel.

The airline bought more fuel in the quarter, which is a positive thing as it means it was operating more flights, but it also purchased it at a higher average cost.Therefore, the increase in passengers transported couldn’t offset the higher cost. Also, fuel hedging offered less gains and therefore helped less in mitigating fuel cost spikes. Specifically, fuel accounted for 1.370 billion $ of that total 4.248 billion $ in cost.

Non fuel related costs were also up in the quarter. This is a trend we have seen across the aviation industry. Staff, maintanence, airport services are all costing more. Inflation is also another issue which is still affecting airlines, as all of us. All these factors have eaten into SIA Group’s Q1 2024 earnings, producing a 282 million $ profit reduction. Total net profits went down from 734 to 452 million $. However, that still is a positive quarter with a positive operating margin.

SIA Group ResultsQ1 2024/25
(million $)
Q1 2023/24
(million $)
Var. %
Total Revenue4,7184,4795.3%
Total Expenditure4,2483,725+14%
Net Fuel Cost1,3701,053+30.1%
Non Fuel Expenditure2,8782,672+7.7%
Operating Profit470755-37.7%
Net Profit452734-38%
Singapore Airlines Airbus A350-900 at Tokyo Haneda Gate

Singapore Airlines Performs Better Than Scoot Operationally

As a group SIA carried 9.6 million passengers in Q1 2024/25. That is quite the significant increase from the prior year’s 8.436 million. However, almost a whole million of those extra passengers were transported by Singapore airlines with scoot only contributing for just under 200,000 passengers. In percentages Singapore Airlines increased its passenger volumes by 17.7% while Scoot by a much more modest, but positive, 6.7%.

Both airlines increased ASKs (Available Seat Kilometers) but increased the RPKs (Revenue Passengers Kilometer) at a slower rate. In Singapore’s case ASKs increased by 14.2% while RPKs increased by 11.9%, which is not ideal but also not that bad. As for Scoot ASKs increased by 5.6% but RPKs only went up by 2.4% which is half the growth rate. What does that mean? That the increased capacity that was put out into the market wasn’t filled and therefore planes flew with lower load factors. In simpler terms, the planes just weren’t as full, which clearly isn’t good for profit.

Singapore Airlines Performance

SIngapore Airlines
Results
Q1 2024/25
(million)
Q1 2023/24
(million)
Var. %
Passengers (millions)6.4455.476+17.7%
RPK (millions)29.02425.932+11.9%
ASK (millions)33.60729.426+14.2%
Load Factor86.4%88.1%-1.7pt
Breakeven Load Factor79.8%71.1%8.7pt

Scoot Performance

Scoot ResultsQ1 2024/25Q1 2023/24Var. %
Passengers (millions)3.1582.960+6.7%
RPK (millions)8.1957.999+2.4%
ASK (millions)9.2128.723+5.6%
Load Factor89.0%91.7%-2.7pt
Breakeven Load Factor93.8%89.7%+4.1pt

The SIA Group Outlook For The Rest of 2024

SIA Group forecasts, as many other airlines also have, passenger demand to remain strong for the remainder of 2024. However, the airline seems to have realised it is unlikely that the profit and yield levels will remain at a similar level to where they were in 2023. There is a lot of capacity coming into the market (competition) and geopolitical tensions can cause unforeseeable revenue drops.