Singapore Airlines Soars with Record Half-Year Profit

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Singapore Airlines’ Record Profits Singapore Airlines (SIAL.SI) has reported a remarkable half-year profit driven by a surge in travel demand, especially to North Asia, as countries fully reopened following the Covid pandemic.

Strong Financial Performance The city-state’s flagship carrier revealed a significant increase in net profit, reaching S$1.44 billion ($1.06 billion) for the six months ending on September 30. This figure marks substantial growth compared to the S$926.9 million reported the previous year.

Dividend Announcement In light of its exceptional performance, Singapore Airlines declared an interim dividend of 10 Singapore cents per share, rewarding its investors.

Rebounding Travel Demand The airline attributed its success to the continued robust demand for air travel, particularly during the Northern Summer travel season. Passenger traffic to North Asia, including China, Hong Kong SAR, Japan, and Taiwan, experienced a resurgence, contributing to the airline’s profitability.

Cost Management Furthermore, Singapore Airlines reported a notable decrease of S$413 million in costs related to fuel over the six-month period. However, the company remains cautious, raising concerns about potential price spikes due to supply risks in the oil market.

Steady Recovery Singapore Airlines and its budget subsidiary, Scoot, collectively carried around 17.4 million passengers during the first half of the year, reflecting a significant year-on-year increase of 52.3%. The airline group anticipates returning to pre-Covid passenger capacity levels by fiscal 2024-2025, highlighting their optimism about the industry’s recovery.

Dealing with Financial Instruments To strengthen its financial position amid the pandemic’s challenges, the airline intends to redeem 50% of the zero-coupon mandatory convertible bonds (MCBs) issued in June 2021. This strategic move aims to bolster its balance sheet, as the aviation sector faced near-total disruption due to the pandemic. The redemption, scheduled for December 26, will ensure that eligible bondholders receive their due.

Merger Plans Additionally, Singapore Airlines confirmed that the proposed merger between Air India and its joint venture with India’s Tata Group, Vistara, is on track. However, it remains subject to regulatory and authority approvals in both countries, signifying the airline’s commitment to expansion and collaboration in the aviation sector.

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