- Passengers figures still down due to further capacity reduction for Singapore Airlines and Tiger Air.
- Yields remain under pressure
Singapore Airlines Group managed to double its operating profits for the first quarter of the financial year 2015/2016 from S$39.5 million (1Q FY2014/15) to S$111.4 million. This result is due to the excellent financial performance of Singapore Airlines (up by 140% from S$45 in 1Q FY2014/15 to S$108) and ts regional affiliate Silk Air which managed to increase its operating profits from S$2 to S$5. In parallel, low-cost long-haul affiliate Scoot managed to reduce significantly its losses from S$25 million in 1Q FY2014/15 to S$20 million during the first quarter FY2015/16.
Passengers figures however remain weak, due to capacity adjustment in the group network (-2.5% capacity into the market) as well as increased competition. Singapore Airlines recorded a decline of 4.2% in total passengers figure during the first quarter while low cost affiliate Tiger Air saw a further reduction in total passengers of 15.4%. Scoot however continues to gain strength thanks to further transfer of frequencies from SIA parent company to the carrier. The airline transported 482,000 passengers during the first quarter 2015/16 compared to 436,000 passengers in last year first quarter. Silk Air also performed extremely well, carrying 11.5% more passengers in 1Q 2015/16 than during 1Q 2014/15.
Singapore Airlines Group continues to suffer from declining yield per passenger. The airline explains the erosion by significant capacity injection and aggressive fares from competitors,
particularly on Americas and Europe routes. Despite predicting a growth in traffic in 2Q of FY 2015/16, outlook remains uncertain. The airline forecasts weaker demand for
Americas and Europe regions, reflecting the competitive environment. Yields are expected to remain under pressure.
Starting August, SIA will bring its new Premium Economy Product to the market, offering greater choice to the airline’s passengers.