The airline said that near-term demand for flights remains healthy as robust appetite for travel delivered a record full-year profit that even beat estimates despite a marginally weaker fourth quarter.
The city state’s flag carrier also highlighted strength in cargo demand towards the end of the financial year amid a shift to air freight by various shippers due to security concerns in the Red Sea region.
“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,” the company said on Wednesday.
The carrier reported annual net profit of S$2.68 billion (US$1.99 billion) for the fiscal ended March 2024, compared with S$2.16 billion a year ago.
It also declared a final dividend of 38 Singapore cents apiece, higher than the 28 Singapore cents a year ago.
The windfall for Singapore Airlines’ staff mirrors the experience of employees at Emirates, which is reportedly handing workers five months of bonus after notching up a record annual profit of US$5.1 billion. The Gulf carrier also paid out a similar amount last year.
Singapore Airlines, however, expects passenger yields – a measure of average fare paid per mile, per passenger – to continue to moderate as airlines expand capacity, especially in the Asia-Pacific region.
“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,” it said.
Singapore Airlines benefited from a faster reopening and rebuild compared to many of its peers after Covid-19 restrictions were lifted. Monthly passenger volumes were around 97 per cent of pre-pandemic levels in March.
But CEO Goh said air travel demand from China is not back to pre-pandemic levels for Singapore Airlines, though a visa-free scheme for Chinese citizens to the Asian hub has helped fill seats and the airline will add more China capacity this year.
“Travel into China has been strong, travel out of China has not yet recovered fully,” he said on Thursday.
He said the visa-free scheme between China and Singapore which began in February has provided “some lift to load factors” for Chinese flights.
The airlines group was progressively restoring China capacity and would increase seats to Shanghai, Beijing and Guangzhou this year, Goh added.
The flag carrier suspended April flights to Chengdu, Chongqing and Xiamen, citing a lack of regulatory approvals. These are now in place and flights will operate until July, when permissions must be resought, Goh said.
Singapore Airlines said it intends to redeem all remaining zero-coupon mandatory convertible bonds (MCBs) that it issued in June 2021 to support its balance sheet amid an almost total shutdown of air travel during the pandemic.
The latest redemption, to be paid to eligible bondholders on June 24, will see the company meet the accreted principal amount payable of S$1.74 billion.
Additional reporting by Reuters