The Singapore Airlines group warned of an increasingly “challenging operating environment” despite a fall in operating and net income in the first quarter of fiscal year 2025, despite passenger numbers reaching new highs.
The airline group, consisting of mainline operators SIA and low-cost brand scoot, saw its operating profit fall by almost 14% to S$455 million ($315.3 million) for the three months ended June 30th.
This comes amidst a steady rise in operating expenses during the quarter. SIA Group's quarterly expenses increased 3.2% to SGD 4.4 billion, while revenue rose 1.5% to above SGD 4.8 billion.
The increase in costs has been led to increased non-fuel costs along with increased capacity, but has been exacerbated by “inflationary pressure on key cost factors,” SIA Group said.
The two airlines carried 6.9% more passengers in the quarter, bringing passenger volume to an all-time high of 10.3 million. Traffic volume increased by 4.3%, but capacity increased by 3.3%, with passenger load factor increasing by 0.7 points to 87.6%.
Nevertheless, the group says that yields continue to decline, falling 2.9% year-on-year amid “strengthening competition.”
Cargo yields also fell by 4.4% over the quarter, coupled with growth in lukewarm cargo loads, down about 2.8%. The SIA Group said that the result was a 1.9% decline in freight revenue.
The group recorded net income of SG$186 million, down 59% per year (three-year minimum first quarter net income), according to airline business data. SIA Group said the decline was due to lower cash balances and interest rate cuts, as well as reduced interest income from related company losses.
It notes that the financial results of carriers, which selects Air India's losses and owns 25.1%, were not included in the results for the same period last year.
Nevertheless, the SIA Group has said it remains “committed” to “participate in India's large and rapidly growing aviation market” through its AirIndian stockholdings.
The group's current fleet at the end of June stood on 204 aircraft. It's a mainline operator SIA with 151 aircraft and 53 jet scoot. There are also 72 aircraft.
