The robust demand for air travel continued into the Northern Summer travel season, led by the rebound in passenger traffic to North Asia, with the full reopening of China, Hong Kong SAR, Japan, and Taiwan.
This resulted in record half-year operating and net profits for the SIA Group. SIA and Scoot carried 17.4 million passengers in the first six months of FY2023/24, an increase of 52.3% year-on-year. Passenger traffic grew 38.0% from a year before, outpacing the capacity expansion of 29.0%. As a result, the Group passenger load factor (PLF) improved by 5.8 percentage points to 88.8%, the highest-ever half-yearly PLF. SIA and Scoot achieved record PLFs of 88.0% and 91.3% respectively.
The demand for air freight remained soft due to inventory overhang and geopolitical and macroeconomic headwinds. The cargo load factor fell 8.4 percentage points to 52.7% year-on-year as cargo loads dipped 6.0%, while capacity grew 8.9% mainly due to increased passenger aircraft belly-hold space.
Increased competition and softer demand also contributed to the downward pressure on cargo yields, which fell by 46.2% from a year before. Nevertheless, at 41.8 cents per load tonnekilometre, cargo yields remained 37.0% above pre-pandemic levels1.
Group revenue rose $745 million (+8.9%) to $9,162 million, with the $1,571 million (+26.3%) increase in passenger flown revenue to $7,550 million partially offset by a $1,039 million (-49.5%) decline in cargo flown revenue to $1,060 million. Expenditure increased by $427 million (+5.9%) to $7,609 million, with the rise in non-fuel expenditure of $840 million (+18.7%) partially offset by a $413 million decrease (-15.3%) in net fuel cost.
Net fuel cost fell to $2,283 million mainly due to a 29.2% decrease in fuel prices (-$1,077 million), despite higher volume uplifted (+$566 million) and lower fuel hedging gain (+$173 million). The 18.7% increase in non-fuel expenditure was in line with the 19.9% increase in overall passenger and cargo capacity.
Overall, the Group recorded an operating profit of $1,554 million, $320 million higher than a year before. The Group posted a net profit of $1,441 million, $514 million more than the previous year (+55.4%), on the strong operating performance.
The improvement in the bottom line was also aided by the net interest income versus net finance charges last year (+$222 million) and share of profits versus share of losses of associated companies last year (+$87 million), partially offset by a higher tax expense (-$118 million). No. 05/23 7 November 2023 Page 3 of 7 Second Quarter FY2023/24 – Profit and Loss.
The Group posted a record quarterly operating profit of $799 million for the second quarter, an increase of $121 million (+17.8%) from last year, on the back of the strong demand over the peak summer season. Group revenue rose $195 million (+4.3%) year-on-year to $4,683 million.
Passenger-flown revenue increased by $570 million (+17.3%) to $3,873 million, lifted by the 28.9% growth in traffic. Group PLF increased 2.0 percentage points to 88.6%, as traffic growth outpaced the increase in capacity (+26.0%).
Cargo flown revenue dipped 48.3% or $484 million to $519 million due to a decline in yield (-48.0%) on weaker demand, coupled with the reinstatement of industry belly-hold cargo capacity. Nonetheless, cargo yields – at 39.2 cents per load tonne-kilometre–were 28.5% above pre-Covid levels1. Cargo loads remained flat year-on-year (-0.5%) while capacity increased 6.0%, resulting in a 3.5 percentage point drop in cargo load factor to 53.5%.
Group expenditure grew by $74 million (+1.9%) year-on-year to $3,884 million. This consisted of a $267 million increase (+11.2%) in non-fuel expenditure that was partially offset by a $193 million decrease (-13.6%) in net fuel cost. Net fuel cost fell to $1,230 million, mainly due to a 25.2% drop in fuel prices (-$478 million) that was partially offset by higher volume uplifted (+$262 million) and a lower fuel hedging gain (+$72 million).
The improvement was mainly due to the better operating performance (+$121 million), a net interest income versus net finance charges last year (+$78 million), and a surplus on disposal of aircraft, spares, and spare engines (+$22 million), and partially offset by higher tax expense (-$56 million).
Balance Sheet As of 30 September 2023, the Group shareholders’ equity was $17.3 billion, a decline of $2.5 billion from 31 March 2023. This was due to the redemption in June 2023 of half of the Mandatory Convertible Bonds (MCBs) that were issued in June 2021, which amounted to $3.4 billion.