Take a first look inside Singapore Airlines' remodelled flagship lounges. Video / Supplied
High demand for travel and Singapore Airlines' rapid capacity build up - including getting planes out of desert storage - has propelled it to a big operating profit in the first quarter of the year.
The airline and subsidiary Scoot have been among the first carriers to launch services andstart sales to points served out of Changi Airport since restrictions began to ease in September last year.
Singapore Airlines (SIA) group capacity has increased from an average of 47 per cent of pre-pandemic levels in the fourth quarter of the 2021-22 financial year to 61 per cent in the first quarter of this year, allowing it to capture the significant pent-up demand.
''As a result, the SIA Group posted a record first-quarter operating profit of $S556 million, (NZ$650m) which was also the second-highest quarterly profit in its history,'' the airline said.
Net profit was $S370m, up from a loss of $409m in the corresponding quarter to June 30, in 2021.
The airline has this year boosted services to New Zealand to 21 flights a week, including seven on commercial alliance partner Air New Zealand. It says demand for air travel rose sharply after Singapore fully opened its borders to vaccinated travellers in April 2022.
SIA and Scoot carried 5.1 million passengers during the quarter – up 158.2 per cent from the previous quarter and fourteen fold higher than a year before. Passenger traffic and load factors were robust across all cabin classes and travel segments, as well as all regions except East Asia where border restrictions remain in certain markets.
SIA's quarterly revenue per available seat-kilometre was 10.2 Singapore cents, a record for the airline.
Singapore Airlines says its network is getting closer to its pre-pandemic size. Photo / Supplied
Passenger load factor rose 34.1 percentage points to 79.0 per cent, the highest since the onset of the pandemic, as the traffic growth outpaced the capacity expansion of 28.9 per cent. Cargo flown revenue fell $17 million (-1.5 per cent) to $1,096b, as the demand for air freight dropped due to pandemic-related lockdowns in China.
The Group recorded an operating cash surplus 2 of $1.4 billion for the three months, a quarter-on quarter improvement of $978m.
During the first quarter, SIA took delivery of two Airbus A350-900s, one of which joined the operating fleet. Three Boeing 737-8s that were delivered in the previous financial year also entered into service during the first quarter. One 737-8 that was delivered during the quarter will join the operating fleet after cabin retrofit.
During the worst of the pandemic, the airline had stored eight Airbus A380s in the Australian outback, near Alice Springs. That number is now down to two, Simple Flying reports.
Alice Springs, the site of Asia Pacific Aircraft Storage (APAS), has been one of the main sites for Singapore Airlines to store its A380s.
The dry climate allows for long-term storage with minimal corrosion in contrast to heat and humidity at its Changi Airport base.
Aircraft have to be sealed airtight and filled with non corrosive gases, while engines are covered to protect them from the weather. A team of flight mechanics have to inspect the aircraft regularly.
In its results announcement SIA said as at June 30, the group's passenger network covered 98 destinations in 36 countries and territories, and is getting closer to the pre-pandemic network.
In its outlook, Singapore Airlines says travel demand is expected to remain robust in the near-term as we head into the year-end holiday travel period, with forward sales staying buoyant for the next three months up to October 2022.
While cargo demand from Asia has been recovering, this is being offset by seasonally slower air cargo activity during the summer. Yields are expected to remain higher than pre-Covid levels in the near to medium term as air cargo capacity remains tight on key trade lanes to and from Asia, particularly between Europe and Asia, amid the Russia-Ukraine conflict.
Changes to the Covid-19 situation in China may also impact the ongoing recovery in the country's export volumes.
''Inflationary pressures including elevated fuel prices remain a concern. Interest rate hikes and slowing economic growth in many countries around the world, including the SIA Group's key markets, are risk factors to passenger travel recovery and air cargo demand which we are monitoring closely,'' the airline says.
