Singapore’s decision to ease most of is Covid-19 travel restrictions in April benefited the country’s namesake airline. Singapore Airlines’ traffic surged in April, and forward bookings for the summer are approaching 2019 levels, the carrier said in its most recent quarterly update on May 18.
Singapore began reopening last year through its Vaccinated Travel Lane program, that granted entry without quarantines to citizens of approved countries who had been vaccinated against Covid-19. But the program still required pre-departure and entry testing. Nevertheless, Singapore Airlines saw demand rebound quickly after the program launched, fueling it to profits of S$10 million ($7.2 million) for the second half of the fiscal year ending in March. Load factors similarly surged from 17 percent in the first half of the fiscal year to more than 43 percent in the last six months.
In April, load factors rose to more than 77 percent. This was driven by the country’s decision that month to drop mandatory testing requirements for vaccinated passengers, as well as countries in the region, including Malaysia and Thailand, also easing restrictions. However, key markets in Northeast Asia, including China, where some key cities are locked down, and Japan remain constrained.
In the second half of its fiscal year, Singapore Airlines resumed service to Australia, India, Indonesia, and South Africa, and brought back its Airbus A380 flights to Delhi, Mumbai, and New York. By the end of March, the airline’s destinations had risen to 93 cities in 36 countries from 86 destinations three months earlier. Still, that is short of the 137 destinations in 37 countries that Singapore Airlines served in 2019.
Singapore Airlines, hamstrung by not having a domestic market, drastically scaled back its passenger operations during the depths of the pandemic. Although the government provided liquidity, the airline laid off or furloughed more than 4,000 employees in 2020.
Cargo, however, continued to be a lifeline for Singapore Airlines. The cargo network expanded to 100 destinations, up from 98 in the third quarter. Cargo revenue set another quarterly record at S$4.3 billion, up 60 percent from the prior fiscal year, while capacity rose 50 percent year-over-year. The unit’s strength was driven by continued surface shipping constraints, driving yields to record highs. However, lockdowns in China and the Ukraine war — and the ensuing spike in fuel prices — are clouding the cargo unit’s future growth, but Singapore Airlines believes near-term yields will remain strong.
The cargo unit will take delivery of seven Airbus A350Fs in 2025 to replace its Boeing 747-400Fs. During the last fiscal year, the cargo unit signed a deal to operate five Boeing 777Fs for DHL on routes between the U.S. and North Asia for e-commerce and package delivery. The aircraft will be crewed by Singapore Airlines staff and will be based at Changi Airport.
In the March quarter, Singapore Airlines took delivery of one A350-900 and three Boeing 737-8s. Its Scoot subsidiary took delivery of three Airbus A321neos. At the end of the year, Singapore Airlines mainline flew 123 passenger aircraft and seven freighters, and Scoot flew 53 passenger aircraft.
As demand returns, Singapore Airlines is recalling staff and replacing employees who left during the pandemic. So far, management said the airline has not faced difficulties with recruitment.
Although Singapore Airlines reported a profit for the last six months of the fiscal year, the group reported a loss of S$610 million for the year ending in March. This was a 76 percent improvement over last year’s S$2.5 billion loss, however. Revenues doubled to S$7.6 billion. Of those, passenger revenues were S$2.1 billion, while cargo revenues were S$4.3 billion. Traffic for the year spiked 615 percent, while capacity grew by 216 percent.