(Reuters) – Singapore Airlines on Thursday reported a record quarterly revenue stemming from robust demand for air travel at the end of last year, but said its capacity expansion outstripped passenger growth, putting downward pressure on air fares.
Despite tough competition in the region as Asian airlines continue to add back capacity after the pandemic, the carrier expects demand to stay healthy in the January-March quarter.
Yields, a proxy measure for air fares, fell 4.5% in the third quarter as the number of extra seats added to its network grew more than passenger numbers.
Group revenue grew 2.7% to a record S$5.2 billion from a year earlier, the airline said.
Its 9.7% year-on-year growth in cargo revenue was stronger than a 1.7% growth in passenger revenue for the quarter, bolstered by strong e-commerce activity, more freighter charters, and a boost in perishable goods transportation, it said.
Singapore Airlines, a major Asian air freight carrier, has benefited from rising volumes of e-commerce out of China and the region.
The airline’s net profit more than doubled to a record in the quarter ended December 31, helped by a one-time gain from the merger of Air India and Vistara.
The city-state’s flag carrier posted a net profit of S$1.63 billion ($1.22 billion) for the quarter, compared to S$659 million a year earlier. About S$1.10 billion of that amount was due to a one-off gain from the Air India-Vistara merger.
Singapore Airlines, which owned about 49% of Indian carrier Vistara, completed a merger of Air India and Vistara last November, in a bid to create a dominant full-service airline for India’s domestic and international markets.
The deal granted Singapore Airlines a 25.1% stake in the Air India group, while autos-to-steel conglomerate Tata holds 74.9% of the combined entity.
Singapore Airlines Group includes Singapore Airlines and budget carrier Scoot.
($1 = 1.3386 Singapore dollars)
(Reporting by Rajasik Mukherjee and Shivangi Lahiri in Bengaluru, Lisa Barrington in Seoul; Editing by Alan Barona and Sonia Cheema)
