Category Archives: Singapore Airlines

DHL Express and Singapore Airlines partnership takes off with new Boeing freighter aircraft

Singapore to operate 5 Boeing 777Fs for DHL

DHL Express has welcomed the arrival of its new Boeing 777F freighter at Singapore Changi Airport.

The freighter, which sports a dual DHL-Singapore Airlines (SIA) livery, has a maximum capacity of 102 tons.

SIA will operate it on routes to the United States of America via South Korea thrice weekly from August 2022.

In March 2022, DHL Express and SIA signed a Crew and Maintenance agreement to deploy five Boeing 777F freighters. These freighters will be operated by SIA pilots, with the maintenance overseen by SIA.

The second Boeing 777 freighter is slated to enter into service in November 2022, following which both freighters will operate the Singapore-Incheon-Los Angeles-Honolulu-Singapore route six times weekly.

The remaining three freighters are planned for delivery throughout 2023.

Following this, all five freighters will operate on routes between the United States and Singapore via points in North Asia and Australia.

Top Copyright Photo: DHL – Singapore Airlines Boeing 777F 9V-DHA (msn 67140) PAE (Nick Dean). Image: 958332.

Singapore Airlines aircraft photo gallery:

Photo: DHL – Singapore Airlines Boeing 777F 9V-DHA (msn 67140) PAE (Nick Dean). Image: 958332.

Singapore to operate 5 Boeing 777Fs for DHL

Singapore Airlines to operate five new Boeing 777F for DHL.

Copyright Photo: DHL – Singapore Airlines Boeing 777F 9V-DHA (msn 67140) PAE (Nick Dean). Image: 958332.

Singapore Airlines resumes nonstop flights to Rome Fiumicino

Singapore Airlines has resumed nonstop flight from Singapore to Rome (Fiumicino).

The restored route will operate three days a week.

Singapore Airlines is the first airline to have restored nonstop connections to East Asia at Leonardo da Vinci since the onset of the pandemic.

Marco Finelli reporting from Italy.

Singapore Airlines aircraft photo gallery:

Singapore Airlines restores the Singapore – Rome route

Singapore Airlines has resumed operations between its Singapore hub and Rome (Fiumicino).

The restored route will operate three days a week.

Marco Finelli reporting from Italy.

Singapore Airlines aircraft photo gallery:

 

SIA Group reduces its net yearly loss by 78%

SIA Group (Singapore Airlines) issued this financial report:

  • Passenger carriage for FY2021/22 up six-fold as travel restrictions ease
  • Record full-year cargo revenue on strong demand and robust yields
  • Operating cash surplus of $824 million for the full year
  • Strong momentum in forward sales across key markets and all cabin classes
  • Transformation programme reinforces SIA Group’s leadership position asoperations ramp upSIA GROUP FINANCIAL PERFORMANCE Financial Year FY2021/22 – Profit and LossThe SIA Group financial performance for the financial year FY2021/22 is summarised as follows:

The Singapore Airlines (SIA) Group carried 3.9 million passengers in FY2021/22, up six-fold from a year before, with international air travel recovering in the last six months as global border restrictions eased. The Group ramped up passenger capacity (measured in available seat-kilometres) in a calibrated manner, growing from 24% of pre-Covid levels in April 2021 to 51% by the end of FY2021/22 in March 2022.

Singapore’s launch and subsequent expansion of the Vaccinated Travel Lane (VTL) scheme was the game changer for the Group. It facilitated quarantine-free mass travel for the first time since the Covid-19 pandemic began, and significantly boosted the demand for flights to and through Singapore. By deploying capacity and increasing services in an agile manner, SIA and Scoot were among the first to launch flights for all VTL points. This allowed the carriers to capture the pent-up demand for air travel as it returned.

As a result, passenger flown revenue grew by $2,121 million (+309.6%) year-on-year to $2,806 million. This was on the back of a 614.9% growth in traffic (revenue-passenger kilometres), which outpaced the capacity expansion of 215.7% and resulted in the passenger load factor rising 16.8 percentage points to 30.1%. Cargo flown revenue reached a record $4,339 million (+$1,630 million or +60.2%), driven by strong demand amid continued capacity constraints for both sea freight and air freight. This led to a 44.5% increase in loads carried, and 10.8% rise in yields. Consequently, Group revenue rose $3,799 million (+99.6%) year-on-year to $7,615 million.

Group expenditure grew by $1,896 million (+30.0%) year-on-year to $8,225 million. This increase consisted of a $1,173 million increase (+115.5%) in net fuel costs, a $1,015 million increase (+19.9%) in non-fuel expenditure, and an offset of $292 million from the year-on-year impact of the fuel hedging ineffectiveness recorded last year, as well as fair value changes on fuel derivatives. Net fuel cost rose to $2,189 million, mainly on higher fuel prices (+$1,081 million) and an increase in volume uplifted (+$661 million), which was partially offset by a swing from a fuel hedging loss to a gain (-$553 million). The increase in non-fuel expenditure by 19.9% was well within the 215.7% increase in passenger capacity and the 50.1% increase in cargo capacity.

The SIA Group recorded an operating loss of $610 million, an improvement of $1,903 million (+75.7%) from the $2,513 million loss a year before.

Impairment charges for aircraft of $51 million were recorded for the year (-$1,683 million or -97.1% year-on-year). This was mainly due to impairment charges for two Boeing 737-800s deemed surplus to requirements, as well as a further write-down to three previously impaired 777-300ERs due to a change in aircraft trade-in plans. This follows a review of the Group’s network requirements, as well as the market values of the aircraft in its fleet in FY2021/22.

The Group posted a net loss of $962 million for the year, an improvement of $3,309 million (+77.5%). This was primarily driven by better operating performance (+$1,903 million) and lower non-cash impairment charges (+$1,894 million), and partially offset by a $532 million reduction in tax credit due to the lower net loss.

The Group recorded an operating cash surplus1 of $824 million for FY2021/22, an improvement of $3,195 million on the back of its stronger performance.

Second Half FY2021/22 – Profit and Loss

The Group recorded an operating profit of $10 million for the six months to 31 March 2022, compared to a $620 million operating loss in the first half (+$630 million). This came as borders reopened in almost all key markets, and as the rapid expansion of VTLs during the six months supported the demand for air travel.

Group revenue rose $1,961 million (+69.4%) half-on-half to $4,788 million. Passenger flown revenue increased by $1,300 million (+172.6%) to $2,053 million as passenger traffic grew 257.2%, outpacing the 46.2% expansion in capacity. As a result, passenger load factor improved 23.4 percentage points to 39.6% in the second half. Cargo flown revenue increased by $589 million (+31.4%) as the yields (+22.1%) and loads carried (+7.6%) were elevated by the strong cargo demand.

Group expenditure grew by $1,331 million (+38.6%) half-on-half to $4,778 million. This increase consisted of a $569 million increase (+70.2%) in net fuel costs, a $682 million increase (+25.1%) in non-fuel expenditure, and $80 million from the half- on-half impact of the fair value changes on fuel derivatives. Net fuel cost rose to $1,379 million, mainly on higher fuel prices (+$354 million) and an increase in volume uplifted (+$323 million), which was partially offset by higher fuel hedging gain (-$115 million). The increase in non-fuel expenditure by 25.1% corresponded with the 46.2% increase in passenger capacity and 21.7% increase in cargo capacity.

Group net loss was $125 million for the second half, an improvement of $712 million (+85.1%) from the first half. This was mainly attributable to the better operating performance (+$630 million) as well as an improvement in share of results of joint venture and associated companies (+$100 million), and partially offset by higher non-cash impairment charges (-$29 million).

Financial Year FY2021/22 – Balance Sheet

The Group has raised $22.4 billion in fresh liquidity since 1 April 2020 through various measures including proceeds from Rights issuances, bond issuances, secured financing, and aircraft sale-and-leaseback transactions.

Note 1: Includes net cash provided by operating activities and repayment of lease liabilities, and excludes proceeds from forward sales.

As of 31 March 2022, the Group shareholders’ equity was $22.4 billion, an increase of $6.5 billion from 31 March 2021. Cash and bank balances saw an increase of $6.0 billion, rising to $13.8 billion primarily due to the proceeds from the Mandatory Convertible Bond issue in June 2021. Total debt balances increased by $1.4 billion to $15.7 billion, mainly due to the issuance of a seven-year US$600 million (or about S$810 million) bond in January 2022, as well as the increase in lease liabilities as a result of sale-and-leaseback activities. Consequently, the Group’s debt-equity ratio fell from 0.90 times to 0.70 times. In addition to the cash on hand, the Group retains access to $2.1 billion of committed lines of credit, all of which remain undrawn.

FLEET DEVELOPMENT

During the final quarter, SIA took delivery of one Airbus A350-900, which joined the operating fleet in January 2022. SIA also took delivery of three Boeing 737-8s, which will enter into service starting from June 2022. Scoot took delivery of three Airbus A321neo aircraft, which have since joined the operating fleet.

As of 31 March 2022, SIA’s operating fleet comprised 123 passenger aircraft and seven freighters, while Scoot had 53 passenger aircraft in its operating fleet.

With an average age of six years and three months, the Group operates one of the youngest and most fuel-efficient fleets in the airline industry4. This results in increased operating efficiencies, as well as significantly lower carbon emissions compared to the older generation aircraft that they replace in the Group fleet.

NETWORK RECOVERY

The Group progressively reinstated services to several destinations, and stepped-up frequencies on existing routes, as travel restrictions eased. Services resumed across key markets including Australia (Cairns, Darwin, and Gold Coast), South East Asia (Danang, Denpasar, and Surabaya), Amritsar in India, and Cape Town (via Johannesburg) in South Africa. SIA resumed non-stop A350-900 ULR services between Singapore and Newark, and began operating its flagship Airbus A380 to India (Delhi and Mumbai), and the United States of America (New York via Frankfurt). Services to Moscow and Shenzhen were suspended during the fourth quarter. Scoot introduced a new destination, Miri, to its network.

At the end of the financial year, the Group’s passenger network covered a total of 93 destinations5 in 36 countries and territories, up from 85 at the end of the third quarter. This compared to a pre-Covid network of 137 destinations5 in 37 countries and territories. SIA served 69 destinations5 and Scoot 43 destinations5. The Group’s cargo network comprised 100 destinations,5 up from 98 at the end of the prior quarter.

Note 2: The 123-passenger aircraft fleet comprised 23 777-300ERs, 12 A380s, 58 A350s, 15 787-10s, 7 737-800s and 8 737-8s.

Note 3: The 53-passenger aircraft fleet comprised 10 787-8s, 10 787-9s, 21 A320ceos, 5 A320neos and 7 A321neos.

Note 4: The current industry average fleet age is around 15 years and 4 months according to Centre for Asia Pacific Aviation (CAPA). Note 5: Number of destinations include Singapore.

Based on current published schedules, the Group expects passenger capacity to reach 61% of pre-Covid levels for the first quarter of FY2022/23. As travel demand continues to recover, passenger capacity is expected to climb to around 67% of pre-Covid levels by the second quarter. The Group expects to serve over 70% of its pre- Covid destinations by the end of the second quarter.

PAVING THE WAY AHEAD

The SIA Group is ready to ramp up operations and capture the returning demand for international air travel. Cabin crew recruitment has resumed after a two-year hiatus to replace staff who have left over the last two years. The Group will continue to make the necessary investment in our people to meet our growth plans. Aircraft utilisation can also be increased quickly to support network expansion.

Various marketing campaigns have been launched to encourage customers to take to the skies again. These include a global brand campaign, We Look Forward to Seeing You in the Air Again, which promises customers an enhanced travel experience with SIA. Time to Fly, SIA’s first online travel fair in Singapore, offered curated travel packages with 10 participating travel agents, serving all market segments. Scoot re- established partnerships with tourism boards across Australia and South East Asia, as well as the Singapore Tourism Board, to incentivise travel to and from Singapore.

KrisFlyer, the SIA Group’s loyalty program, relaunched its KrisFlyer Spontaneous Escapes monthly promotion after two years. This allows members to stretch the value of their miles and book last minute getaways to a variety of SIA destinations.

Deepening collaboration with like-minded airlines remains an integral part of the Group’s strategy. By strengthening separate partnerships with Garuda Indonesia and Malaysia Airlines, the airlines will offer more options for customers, as well as enhanced connectivity to drive tourism in South East Asia. The recent expansion of the codeshare agreement between United Airlines and SIA will enable customers to connect to even more destinations within both airlines’ network.

The footprint of SIA’s cargo business continues to grow with the signing of a crew and maintenance agreement with DHL Express for five Boeing 777 freighters. These freighters will sport a dual DHL-SIA livery, and be operated by SIA pilots on routes to the United States of America via points in North Asia from July 2022. SIA will also oversee the maintenance of these aircraft. Basing these freighters at Changi Airport will further reinforce Singapore’s position as a key air logistics hub. It will support the fast- growing e-commerce segment, and also provide a foundation to expand the partnership between SIA and DHL in the future.

SIA has also firmed up an order for seven Airbus A350F freighters to replace its fleet of Boeing 747-400Fs. Deliveries will begin in the fourth quarter of 2025, and SIA will be the first operator of this new-generation aircraft. The renewal of the freighter fleet reflects SIA’s continued investment in its key air cargo segment.

SIA, the Civil Aviation Authority of Singapore, and Temasek have embarked on a year-long study into the operational viability of sustainable aviation fuels in Singapore. Jet fuel that has been blended with neat sustainable aviation fuel will be uplifted on SIA and Scoot flights from the third quarter of 2022 as part of this pilot. Sustainable fuels are a key decarbonisation lever for airlines, and a critical pathway for the success of the Group’s commitment to achieve net zero carbon emissions by 2050.

FINAL DIVIDEND

In view of the significant losses incurred and the need to conserve cash, the Board is not proposing a final dividend for the financial year ended 31 March 2022.

OUTLOOK

Singapore further relaxed border restrictions in April 2022, removing the need for quarantine, as well as both pre-departure and on-arrival Covid-19 tests for fully vaccinated travellers. Key markets around the world have further eased travel restrictions, supporting a strong recovery in demand in air travel across all cabin classes. Forward sales, when measured as a percentage of the total number of seats available, in the next three months up to August 2022 are approaching pre-Covid-19 levels. The Group will closely monitor demand, remain nimble and alert to all opportunities that may arise, and adjust its capacity and services accordingly.

Cargo demand is expected to experience near-term volatility as a result of the Russia-Ukraine conflict, as well as the knock-on effects of pandemic controls in China on the global supply chain. Cargo yields, however, are likely to remain healthy due to the continued industry capacity crunch on key trade lanes.

Inflationary pressures, in particular on fuel prices, remain a concern. In comparison to the average jet fuel price of US$90.31 per barrel (before hedging) for FY2021/22, spot prices have moved up by more than 50% and were close to US$150 per barrel, as of early May. The Group will maintain appropriate cost discipline, even as operations expand in line with demand.

The Group’s second three-year Transformation programme, that began in FY2020/21, continues to make good progress in revenue and cost initiatives as well as in the areas of innovation and digital transformation. The SIA Group will remain agile and leverage on opportunities to reinforce its leadership position in the airline industry.

Singapore Airlines aircraft photo gallery:

United and Singapore expand their codeshare agreement

Star Alliance members United Airlines and Singapore Airlines (SIA) today announced an expansion to their codeshare agreement, making it easier for customers to travel to more cities in the United States of America, South East Asia and other destinations in the Asia-Pacific region.

 

Passengers can now enjoy codeshare flights to 19 new diverse and fast-growing cities ideal for both business and leisure travelers alike, tapping Singapore Airlines’ and United Airlines’ industry-leading networks.

Beginning April 26, 2022, United’s customers will be able to connect to nine new codeshare destinations in the SIA Group network. Of these, seven points are in South East Asia. These are Brunei’s capital Bandar Seri Begawan, Siem Reap in Cambodia, Kuala Lumpur and Penang in Malaysia, and Denpasar (Bali), Jakarta and Surabaya in Indonesia. They may also connect to Perth in Australia, as well as Male in the Maldives with SIA.

SIA customers may connect on United’s flights out of Los Angeles to 10 new codeshare destinations in the US. These are Austin, Baltimore, Boise, Cleveland, Denver, Honolulu, Las Vegas, Phoenix, Reno and Sacramento. This complements the existing connections available on United’s network from Houston to Atlanta, Austin, Dallas/Ft. Worth, Ft. Lauderdale, Miami, New Orleans, Orlando and Tampa.

This announcement comes amid growing demand for international air travel as more countries around the world ease border restrictions. As travel resumes, customers can look forward to enjoying Singapore Airlines’ and United Airlines’ new codeshare flights, award-winning service, and the ability to redeem and earn points and miles while flying on both carriers.

Singapore Airlines now flies to Darwin

Singapore Airlines as of March 29 now operates twice-weekly services between Singapore and Darwin, making it the 7th Australian destination in our network.

Singapore Airlines to operate Boeing 777F freighters for DHL

DHL Express, the world’s leading international express services provider, has entered into a Crew and Maintenance agreement (CM) with Singapore Airlines (SIA) to deploy five Boeing 777 freighters. This agreement marks a further step in DHL Express’ expansion of its intercontinental air network to meet customer demand in fast-growing international express shipping markets.

Mr Travis Cobb, Executive Vice President Global Network Operations and Aviation, DHL Express, said: “With the deployment of five Boeing 777 freighters, we can expand our express service linking the Asia Pacific region with the Americas. Following the pandemic, we see good prospects for strong growth in trans-Pacific trade lanes. By collaborating with Singapore Airlines, we see a unique chance to establish a long-lasting relationship with a long time partner who shares common values and operates at the highest standard.”

Based at Singapore’s Changi Airport and serving DHL’s South Asia Hub there, the freighters, which will sport a dual DHL-SIA livery, will be operated by SIA pilots on routes to the United States of America via points in North Asia. SIA will also oversee the maintenance of these aircraft.

The initial agreement is set for more than four years with the opportunity for an extension. As part of the agreement, the first aircraft delivery will be in July 2022, with the second in October 2022. The remaining three aircraft are planned for delivery throughout 2023.

DHL Express continuously invests to meet steady growth in cross-border time-sensitive shipments. It operates over 320 dedicated aircraft across its global network of 220 countries and territories. The Boeing 777 freighters are the world’s largest, longest range, and most capable twin-engine freighters that also contribute to DHL’s sustainability goals, reducing CO2 emissions by 18% compared to the legacy Boeing 747-400s.

SIA’s cargo division operates to more than 90 destinations as part of its current network, which includes a fleet of freighters as well as the bellyhold space of the SIA and Scoot passenger aircraft. The airline recently ordered Airbus A350F freighters as part of its fleet renewal programme. SIA continues to invest in its cargo capabilities, capitalising on healthy demand fuelled by growth in e-commerce, fresh produce, and pharmaceuticals, among other segments.

SIA Group posts its first profitable quarter since the onset of the COVID-19 pandemic

SIA Group issued this financial report:

  • Significant growth in passenger numbers as vaccinated travel lanes unlock pent- up demand for air travel during year-end holiday season
  •   Record cargo revenues driven by robust demand and tight capacity which support loads and yields
  •   Operating cash surplus achieved for the first nine months of FY2021/22
  •   Continued investment in transformation positions SIA Group for future growth

    SIA GROUP FINANCIAL PERFORMANCE Third Quarter FY2021/22 – Profit and Loss

The SIA Group’s unaudited financial results for the third quarter ended 31 December 2021 were announced on 24 February 2022. A summary of the financial and operating statistics is shown in Annex A. All monetary figures are in Singapore Dollars. The Company refers to Singapore Airlines, the Parent Airline Company. The Group comprises the Company and its subsidiary, joint venture, and associated companies.

The Singapore Airlines (SIA) Group posted a quarterly profit for the first time since the onset of the pandemic, recording a third quarter net profit of $85 million. This came amid a significant step-up in air travel to and through Singapore in the October- December 2021 period, as well as continued robust demand and strong yields in the cargo market.

Singapore’s launch of Vaccinated Travel Lane (VTL) arrangements and its subsequent expansion, as well as the Group’s nimble response that resulted in it being the first to open sales on almost all available routes, helped unlock pent-up demand during the year-end travel season. The Group carried 1.1 million passengers during the quarter, more than five times the number from a year before and double that of the second quarter of FY2021/22. Passenger capacity (measured in available seat-kilometres) grew 183.8% year-on-year, as the Group ramped up flights in response to the VTLs. By the end of the quarter, Group passenger capacity reached 45% of pre-Covid-19 levels.

Improvements in passenger and cargo revenue resulted in the Group revenue rising $1,249 million (+117.1%) year-on-year to $2,316 million. Passenger flown revenue increased by $650 million (+355.2%) to $833 million, on the back of a 556.8% growth in traffic (revenue-passenger kilometres) that outpaced capacity expansion, resulting in the passenger load factor rising 18.9 percentage points to 33.2%. Cargo flown revenue rose by $607 million (+81.6%) to $1,351 million, surpassing the $1 billion mark for the first time and setting yet another new quarterly record. Robust demand during the traditional cargo peak period was buoyed by retail inventory restocking and strong e-commerce traffic. Cargo yields rose significantly (+26.9%) amid an ongoing industry capacity crunch.

The expansion of operations resulted in Group expenditure growing $842 million (+60.2%) year-on-year to $2,240 million. This increase consisted of a $359 million increase (+131.0%) in net fuel costs, a $331 million increase (+26.0%) in non-fuel expenditure, and $152 million from the year-on-year impact of the fuel hedging ineffectiveness recorded last year and fair value changes on fuel derivatives. Net fuel cost rose to $633 million, mainly on higher fuel prices (+$330 million) and an increase in volume uplifted (+$173 million), which was partially offset by a swing from a fuel hedging loss to a gain (-$144 million). The increase in non-fuel expenditure by 26.0% was well within the 183.8% increase in passenger capacity and the 49.2% increase in cargo capacity.

As a result, the Group recorded an operating profit of $76 million for the three months ended December 2021, versus a $331 million loss from a year before (+$407 million).

The SIA Group’s improvement in financial performance, quarter-on-quarter, is summarized as follows:As international air travel progressively recovered over the course of the year, the Group’s operating loss for the nine months to December 2021 narrowed by $1,651 million or 75.3% year-on-year, to $543 million.

Revenue grew $2,442 million (+90.4%) from significant passenger and cargo flown revenue improvements. Passenger flown revenue increased $1,248 million (+369.2%) on the back of a recovery in passenger traffic. Cargo flown revenue rose $1,242 million (+62.6%), driven by higher loads carried (+54.3%) and yields (+5.5%).

Group expenditure increased by $791 million (+16.2%) year-on-year to $5,686 million. This increase consisted of a $793 million increase (+122.0%) in net fuel cost, a $488 million increase (+12.7%) in non-fuel expenditure, and an offset of $490 million from the year-on-year impact of the fuel hedging ineffectiveness recorded last year and fair value changes on fuel derivatives. Net fuel cost rose to $1,443 million mainly on higher fuel prices (+$763 million) and an increase in volume uplifted (+$419 million), which was partly offset by a swing from a fuel hedging loss to a gain (-$353 million). The increase in non-fuel expenditure by 12.7% was modest, relative to a 296.1% increase in passenger capacity and a 49.4% increase in cargo capacity. The Group continues to exercise cost discipline as it pursues efficiency and cost reduction initiatives as part of its ongoing three-year Transformation program that began in FY2020/21.

Group net loss was $752 million for the first nine months, a year-on-year improvement of $2,857 million. This was largely attributable to the better operating performance (+$1,651 million), and the absence of $1,630 million in non-cash cost items recorded in the previous year, partly offset by a reduction in tax credit of $474 million.

As a result of the stronger performance for the third quarter, the Group recorded an operating cash surplus1 of $322 million for the first nine months of the year. This reversed the operating cash burn that it had been experiencing since the start of the pandemic.

Third Quarter FY2021/22 – Balance Sheet

By the end of the third quarter, the Group had raised $21.6 billion in fresh liquidity since 1 April 2020. This includes proceeds from the Rights 2021 Mandatory Convertible Bonds (MCB), which raised $6.2 billion in additional liquidity in June 2021.

As of 31 December 2021, the Group shareholders’ equity was $22.1 billion, an increase of $6.2 billion compared to 31 March 2021. Cash and bank balances saw an increase of $4.3 billion, rising to $12.1 billion primarily due to the Rights 2021 MCBs. Total debt balances increased by $0.6 billion to $14.9 billion, mainly due to the increase in lease liabilities as a result of sale-and-leaseback activities. Consequently, the Group’s debt-equity ratio fell from 0.90 times to 0.67 times. In addition to the cash on hand, the Group retains access to $2.1 billion of committed lines of credit which remains undrawn.

FLEET DEVELOPMENT

During the quarter, the strong demand for VTL services enabled the reactivation of A380 operations to London and Sydney. SIA took delivery of one Airbus A350 and four Boeing 737-8 aircraft, while Scoot took delivery of two A321neo aircraft. These aircraft will progressively join the operating fleet starting from January 2022.

As of 31 December 2021, SIA’s operating fleet comprised 121 passenger aircraft2 and seven freighters while Scoot had 50 passenger aircraft3 in its operating fleet. With an average age of six years and three months, the Group operates one of the youngest and most fuel-efficient fleets in the airline industry4.

NETWORK RECOVERY

During the quarter, with the continued expansion of its network, the Group saw a significant increase in the number of destinations that it served. This was led by the restoration of services to 12 cities in India, including VTL services from Chennai, Delhi, and Mumbai, as well as the resumption of flights to several points in South East Asia. SIA also launched services on the Singapore-Vancouver-Seattle route, and resumed flights to Houston (via Manchester). Scoot launched operations to Gatwick (via Bangkok) and Davao, and resumed services to Jeddah.

Note 1: Includes net cash provided by operating activities and repayment of lease liabilities, and excludes proceeds from forward sales.
Note 2: The 121-passenger aircraft fleet comprised 23 777-300ERs, 12 A380s, 56 A350s, 15 787-10s, 9 737-800s and 6 737-8s. Note 3: The 50-passenger aircraft fleet comprised 10 787-8s, 10 787-9s, 21 A320ceos, 5 A320neos and 4 A321neos.

Note 4: The current industry average fleet age is around 15 years and 3 months according to Centre for Asia Pacific Aviation (CAPA).

By the end of the December quarter, the Group’s VTL network covered 31 cities across key markets in Australia, Europe, India, North America, South East Asia, and South Korea. The Group’s passenger network covered a total of 85 destinations,5 up from 65 in the previous quarter, with SIA serving 63 and Scoot serving 35. The Group’s cargo network comprised 95 destinations,5 up from 78 as at the end of the prior quarter.

In January 2022, SIA began passenger services between Milan and Barcelona. This is SIA’s second fifth freedom service in Europe. SIA also resumed passenger services to Denpasar in February 2022. Scoot launched operations to Miri, and resumed operations to Amritsar, Gold Coast and Hanoi during the first two months of 2022. In the coming months, the A380 fleet will expand its operations to Delhi, Mumbai, and New York via Frankfurt.

Based on current published schedules, the Group expects passenger capacity to reach 51% by March 2022. This should result in an average capacity of 47% for the fourth quarter of FY2021/22, compared to pre-Covid levels. The Group expects to serve over 70% of its total pre-Covid destinations by the end of the financial year.

SIA is expanding its VTL network to progressively include Cairns, Darwin, Dubai, Hong Kong, Manila, New York (Newark), and Phuket from 25 February 2022. SIA will also step up frequencies for flights between Singapore and several existing VTL destinations including Bandar Seri Begawan, Colombo, Male, and Phnom Penh. Scoot will progressively include Chiang Mai, Cebu, Clark, Davao, Hong Kong, Jeddah, Krabi, London (Gatwick), and Phuket to its VTL network, and will also increase its frequency for services between Singapore and Phuket. With these new additions, the SIA Group will operate VTL services from 49 cities in 25 countries to Singapore.

During the Northern Summer operating season (27 March 2022 to 29 October 2022), SIA will resume daily non-stop services to Newark. With this, SIA will have three daily services to the New York City metro area alongside twice daily flights to John F. Kennedy International Airport. The Singapore-Vancouver-Seattle service, which was originally planned as a seasonal operation, will continue beyond the current Northern Winter. A fourth daily Heathrow service will be added, reinstating London frequencies to pre-Covid levels. Services to Cairns and Darwin will also resume in the coming months.

PAVING THE WAY AHEAD

SIA launched its all-new narrowbody cabin products, including lie-flat Business Class seats, on the Boeing 737-8 in November 2021. This sets a new standard in the short-haul segment, and provides customers with greater product and service consistency for Business Class across SIA’s fleet.

Note 5: Number of destinations include Singapore.

In December 2021, SIA announced that it will purchase seven Airbus A350F freighters, with options for five more aircraft. This order was firmed up in February 2022. SIA will be the launch operator for this aircraft, with the first delivery expected in the fourth quarter of 2025. The A350Fs will burn 40% less fuel compared to SIA’s Boeing 747-400F freighters on similar missions, reducing carbon emissions by around 400,000 tonnes annually based on current operations, and boast a longer range that offers greater flexibility in deployment. Renewing the freighter fleet reflects SIA’s continued investment in the air cargo segment, a core business for the Company.

SIA successfully raised a seven-year US$600 million (or about S$810 million) bond in January 2022. This is SIA’s second US dollar-denominated bond issue, building on its successful debut issuance last year. Inclusive of this bond issue, SIA has raised around $22.4 billion in additional liquidity since 1 April 2020. SIA also has access to more than $2.1 billion in committed lines of credit. This liquidity strengthens its financial foundation, enabling the Group to make strategic investments to secure its industry- leading position.

Deepening collaboration with like-minded airlines remains an integral part of the Group’s strategy. The recent expansion of separate partnerships with Garuda Indonesia and Malaysia Airlines will see the airlines working closely to offer more options and value to customers, and drive traffic to their respective hubs. It would also support the recovery of South East Asia’s tourism industry from the impact of the pandemic.

KrisFlyer continues to bolster its position as a leading lifestyle-centric rewards program. In January 2022, KrisFlyer announced the extension of membership statuses by a further year. The program was also enhanced to provide members with more recognition and greater benefits, including further opportunities to earn and redeem miles with both Singapore Airlines and Scoot.

The Group has made good progress in cost and revenue initiatives under its three-year Transformation journey, with multiple projects that reinforce the Group’s foundations underway. Collaboration with external partners supports these goals. The recently launched SIA-National University of Singapore (NUS) corporate laboratory, for example, will help develop innovative solutions that enhance the customer experience and travel journey, optimize revenue generation, and increase operational efficiency.

The SIA Group remains focused on its long-standing commitment towards environmental sustainability and decarbonization across its operations. Together with the Civil Aviation Authority of Singapore (CAAS) and global investment company Temasek, the Group has embarked on a pilot program looking into the operational and commercial viability of using sustainable aviation fuels (SAF) in Singapore. This includes purchasing 1.25 million litres of neat SAF, blending it with refined jet fuel, and having it delivered to Changi Airport via the airport’s existing fuel hydrant system to SIA and Scoot flights. With sustainable aviation fuels viewed as a key decarbonization lever, this pilot supports the Group’s commitment to achieve net zero carbon emissions by 2050.

OUTLOOK

Singapore’s VTL arrangements have been a game changer for the SIA Group, facilitating quarantine-free mass travel for the first time since the pandemic began. While demand should continue to recover, especially on VTL services, passenger traffic is likely to moderate in the fourth quarter after the end of the year-end holiday season.

The emergence of the Omicron variant in December 2021 resulted in the imposition of additional border restrictions by some governments. However, those measures gradually eased as concerns about the virulence of the variant abated. Several key markets have further relaxed testing requirements for incoming passengers, in line with their goal of living with the Covid-19 virus. The Group will remain nimble and proactive in adjusting its capacity and network, in tandem with the prevailing market conditions and regulations.

The SIA Group will also remain alert to all revenue and growth opportunities that come its way. For example, SIA is operating dedicated flights between Singapore and Beijing between January and March 2022 in support of the 2022 Winter Olympics, transporting international officials and athletes to China for the Games.

Following a record peak period in the third quarter of FY2021/22, overall air cargo demand is expected to ease in the fourth quarter. This is in line with seasonal fluctuations, and the traditional slowdown in exports during the Lunar New Year holiday period. Nonetheless, both air and sea freight capacities are expected to remain tight during the quarter, supporting loads and yields.

Fuel prices have been trending higher and volatility is expected to persist in the months ahead. The Group will continue to keep a tight rein on costs, while supporting the expansion of operations in line with demand.

SIA finalizes its order for the new Airbus A350F

Singapore Airlines (SIA) has finalized a purchase agreement with Airbus for seven A350F freighter aircraft. The order was signed at the Singapore Airshow by SIA CEO Goh Choong Phong, and Airbus Chief Commercial Officer and Head of International Christian Scherer.

The order firms up the carrier’s commitment to the new generation freighter announced by the plane maker in December 2021. The newly ordered aircraft will replace the carrier’s existing 747-400F fleet from the fourth quarter of 2025.