Due to increased travel demand and solid cargo operations, Singapore Airlines (SIA1) (SINGY) has earned its first quarterly profit since the onset of the COVID-19 epidemic.
The airline reported a net profit of $85 million for the third quarter of its fiscal year on February 24, 2022, up from a deficit of $142 million the previous year. Revenue more than doubled to $2.3 billion in the three months ending December 31, 2021.
“This came amid a significant step-up in air travel to and through Singapore in the October-December 2021 period, as well as continued robust demand and strong yields in the cargo market,” the company commented in a financial results statement.
Cargo revenue increased by over 82 percent to $1.35 billion, a new quarterly high and the first time it surpassed $1 billion. Despite the continued supply chain disruption and capacity crunch, cargo yields increased by 27%.
Singapore Airlines Group carried 1.1 million passengers in the third quarter, up from 500,000 in the previous quarter. During the quarter, the airline group restored service to 12 Indian cities, as well as Houston via Manchester and several points in Southeast Asia.
It also began service on the Singapore-Vancouver-Seattle route, while Scoot, the airline’s low-cost subsidiary, began service to Gatwick via Bangkok and restarted service to Jeddah.
SIA was also able to revive A380 operations to London and Sydney due to the demand for Vaccinated Travel Lane routes. The VTL technology was described by the organization as a “game-changer.”
“While demand should continue to recover, especially on VTL services, passenger traffic is likely to moderate in the fourth quarter after the end of the year-end holiday season,” the group commented.
Fuel costs, however, have been going higher, and volatility is projected to continue, according to the business. Following Russia’s invasion of Ukraine, oil prices surpassed $100 per barrel for the first time in seven years on February 24, 2022.
“The Group will continue to keep a tight rein on costs, while supporting the expansion of operations in line with demand,” the group declared.
SIA’s operating fleet consisted of 121 passenger aircraft and seven freighters as of December 31, 2021, whereas Scoot’s operating fleet consisted of 50 passenger aircraft.
During the quarter, SIA received one Airbus A350 and four Boeing 737-8 aircraft, while Scoot received two A321neo aircraft. From January 2022, these aircraft will be operational within the group.