The demand for air travel remained buoyant throughout FY2023/24, boosted by a rebound in North Asia as China, Hong Kong SAR, Japan, and Taiwan fully reopened their borders. SIA and Scoot carried a combined 36.4 million passengers, up 37.6% year-on-year. Passenger traffic grew 26.6%, outpacing the capacity expansion of 22.9%. As a result, the Group passenger load factor (PLF) improved 2.6 percentage points to a record 88.0%. SIA and Scoot registered record PLFs of 87.1% and 91.2% respectively.
Group revenue rose $1,238 million (+7.0% year-on-year) to a record $19,013 million. Passenger flown revenue rose by $2,319 million (+17.3%) to $15,685 million, despite a 7.6% decline in passenger yields. Cargo flown revenue fell $1,485 million (-41.2%) to $2,119 million. While cargo loads increased by 1.7% due to the strong demand from the e-commerce segment, yields were 42.2% lower year-on-year – albeit 29.8% above pre-pandemic levels2.
Group expenditure increased $1,202 million (+8.0%) to $16,285 million. Non-fuel expenditure rose by $1,336 million (+13.5%), and was partially offset by a $132 million decrease (-2.5%) in net fuel cost. The increase in non-fuel expenditure was lower than the 16.0% increase in overall passenger and cargo capacity. On the other hand, net fuel cost fell despite higher volumes uplifted (+$918 million) and a lower fuel hedging gain (+$358 million), mainly due to an 18.5% decrease in fuel prices (-$1,281 million).
As a result, Group operating profit reached a record $2,728 million, up $36 million or 1.3% from a year before.
The Group’s net profit improved by $518 million (+24.0%) to $2,675 million. This was mainly due to the better operating performance (+$36 million), a net interest income versus net finance charges a year before (+$215 million), lower tax expense (+$132 million)3, and a share of profits versus a share of losses of associated companies from the previous year (+$104 million).
Second Half FY2023/24 – Profit and Loss
Second half Group revenue rose by $492 million (+5.3%) year-on-year to $9,850 million, marking a record for the Group’s half-yearly revenue. This was driven by a $749 million (+10.1%) increase in passenger flown revenue on the back of a 17.5% growth in traffic, which was slightly below the 17.7% expansion in capacity. The Group PLF remained almost flat at 87.3% (-0.1 percentage point). Passenger yields declined 6.0% on intensifying competition as other airlines progressively restored capacity.
Cargo revenue fell $446 million (-29.7%), with yields declining (-35.9%) amid the recovery in bellyhold cargo capacity. This was partly offset by an increase in loads (+9.7%) due to robust e-commerce flows. The demand for air freight from Asia was also supported by security concerns in the Red Sea, bolstering the overall cargo performance.
Expenditure grew $776 million (+9.8%), consisting of a $496 million increase (+9.2%) in non-fuel expenditure and a $280 million increase (+11.1%) in net fuel cost. Net fuel cost increased to $2,794 million, mainly due to higher volume uplifted (+$365 million) and lower fuel hedging gain (+$185 million), and partially offset by a 6.8% drop in fuel prices (-$219 million).
In the second half, the Group operating profit decreased by $284 million (-19.5%) from the previous year to $1,174 million. The Group net profit was stable, rising $4 million year-on-year to $1,234 million. This was mainly driven by a lower tax expense (+$249 million) and a surplus on disposal of aircraft, spares, and spare engines versus a loss the year before (+$45 million), which offset the decline in operating performance.
Balance Sheet
As of 31 March 2024, the Group shareholders’ equity was $16.3 billion, down $3.5 billion from 31 March 2023. This was due to the partial redemption in June and December 2023 of the June 2021 Mandatory Convertible Bonds (MCBs) for $5.1 billion, including accrued yield. Total debt balances decreased by $1.9 billion to $13.4 billion, mainly due to the repayment of borrowings. As a result, the Group’s debt-equity ratio increased from 0.77 times to 0.82 times.
Cash and bank balances decreased by $5.1 billion to $11.3 billion, arising from the redemption of the MCBs, repayment of borrowings, and payment of dividends. This was mitigated by the $5.1 billion of net cash generated from operations, which included proceeds from forward sales. On top of the cash on hand, the Group has access to $2.9 billion of committed lines of credit, all of which remain untapped at present.
As of 31 March 2024, the Group operating fleet consisted of 200 aircraft with an average age of seven years and three months. SIA had 142 passenger aircraft4 and seven freighters, while Scoot had 51 passenger aircraft5. In April 2024, the Group added one Airbus A350-900 and two Embraer E190-E2 aircraft to its fleet. As of 1 May 2024, the Group had 89 aircraft on order6.
As of 31 March 2024, the Group’s passenger network7 covered 118 destinations in 35 countries and territories. SIA served 73 destinations while Scoot served 67. The cargo network comprised 123 destinations in 37 countries and territories.
For the Northern Summer 2024 operating season (31 March 2024 to 26 October 2024), Barcelona, Beijing, Darwin, Hong Kong SAR, Houston, Kuala Lumpur, Melbourne, Milan, Perth, Rome, Seattle, Shanghai, Taipei-Tokyo (Narita), and Yangon will see an increase in services. SIA launched services to Brussels in April 2024 and will begin operations to London (Gatwick) in June 2024.
Scoot began Embraer E190-E2 operations on 7 May 2024 with flights to Krabi. The aircraft will operate to existing destinations such as Hat Yai, Miri, and Kuantan, as well as two new points – Koh Samui (in May 2024) and Sibu (in June 2024). Operating the aircraft on thinner routes to non-metro destinations in the Asia-Pacific allows the Group to unlock significant growth opportunities in the region.
FINAL DIVIDEND
The Board of Directors recommends a final dividend of 38 cents per share for FY2023/24.
Including the interim dividend of 10 cents per share paid on 22 December 2023, the total dividend for FY2023/24 will be 48 cents per share. Subject to shareholder approval at the Annual General Meeting on 29 July 2024, the final dividend (tax exempt, one-tier) would be paid on 21 August 2024 for shareholders as of 2 August 2024.
SUBSEQUENT EVENT – ALL REMAINING MCBs TO BE REDEEMED
On 15 May 2024, the Company announced its intention to redeem all remaining MCBs that were issued in June 2021. The accreted principal amount payable, being 112.616% of the principal amount of the MCBs, will be $1,744.6 million. The redemption amount will be paid to eligible bondholders on 24 June 2024. With this, the Company would have fully redeemed the $9.7 billion of MCBs that were issued in 2020 and 2021. The SIA Group thanks all shareholders, including Temasek, for their strong support for its Right Issues during the Covid-19 pandemic.
OUTLOOK
The demand for air travel remains healthy in the first quarter of FY2024/25, supported by a strong pick up in forward bookings to North Asia and South East Asia. Passenger yields will likely continue to moderate due to increased capacity injection by airlines, especially in the Asia-Pacific region. The Group will closely monitor market conditions and adjust our network as necessary in line with demand patterns.
Cargo demand strengthened towards the end of FY2023/24, on the back of healthy e-commerce demand, resilient and growing segments such as perishables and concerts, as well as a shift to air freight by some shippers due to security concerns in the Red Sea region. While yields have held above pre-pandemic levels in FY2024/25, there continues to be downward pressure as industry bellyhold capacity increases. The Group will monitor key trade lanes to ensure the competitiveness of the cargo segment.
The airline industry continues to face challenges including rising geopolitical tensions, an uncertain macroeconomic climate, supply chain constraints, and high inflation in many parts of the world.
MAINTAINING THE SIA GROUP’S LEADERSHIP POSITION
The SIA Group is well-positioned to seize emerging growth opportunities and navigate uncertainties thanks to its strong foundations and long-term strategic initiatives. These include its robust balance sheet, a firm commitment to developing its people, and long-standing investment in digital capabilities including Generative Artificial Intelligence. The Group also continuously invests in the three pillars of its brand promise – network connectivity, product leadership, and service excellence.
The Group will continue to enhance the synergies between SIA and Scoot. Leveraging two industry-leading brands in its portfolio allows the Group to offer a wider variety of options to travellers, and respond in a nimble and flexible manner to changing market dynamics. Stronger partnerships with other like-minded carriers, as well as enhanced code-share arrangements, allow the SIA Group to offer a combined network that covers 387 destinations, giving customers more options and greater value.
The proposed merger of Air India and Vistara was approved by the Competition and Consumer Commission of Singapore on 5 March 2024. It is pending foreign direct investment and other regulatory approvals. Once completed, it will give SIA a 25.1% stake in an enlarged Air India Group with a significant presence in all key Indian airline market segments, including domestic, international, full-service, and low-cost. This will strengthen SIA’s multi-hub strategy, and allow the Group to continue participating directly in this large and fast-growing aviation market.
Membership numbers at KrisFlyer, the SIA Group’s loyalty programme, grew 31% year-on-year to 8.8 million members as of 31 March 2024, while revenues at the programme level were more than 20% higher at $1.21 billion. KrisFlyer continues to expand its reach with more partnerships, and provide greater options for members to earn and use their miles.
SIA continues to invest in enhancing the end-to-end customer experience. A new SilverKris Lounge at Perth International Airport was opened in February 2024, and plans are underway to progressively upgrade other lounges in SIA’s network. In March 2024, SIA unveiled a comprehensive revamp of its Premium Economy Class in-flight experience, introducing a wide variety of new and refreshed meal options, along with a new amenity kit. Customer feedback to these enhancements has been very positive.
The SIA Group is firmly committed to its sustainability goals, and continuously seeks ways to integrate them across its operations. In November 2023, SIA and Scoot set a target to fulfil 5% of their total fuel requirements with Sustainable Aviation Fuel (SAF) by 2030. This marks an important milestone in the Group’s decarbonisation journey, and its long-term goal of achieving net zero carbon emissions by 2050. In May 2024, the Group signed an agreement with Neste to purchase 1,000 tonnes of neat SAF, which will be the first batch to be produced in Neste’s Singapore refinery for delivery to Singapore Changi Airport. This builds on the Group’s long-standing collaboration with industry and ecosystem stakeholders to support the increased production and use of SAF in Singapore.
The SIA Group is deeply committed to making a positive impact in the communities it serves. In September 2023, its SIA Cares fundraising drive helped to raise $2.6 million for two Singapore-based social service agencies that support communities with special needs. Continuing with this long-standing commitment, the Group plans to establish a foundation that will support individuals in need and contribute to the advancement of Singapore’s aviation industry. More details will be shared at a later date.
The SIA Group is grateful for the strong support from all customers, both in Singapore and around the world, as well as all stakeholders including our shareholders, partners, and staff.
