Singapore Airlines (SIA) announced a remarkable net profit of S$2.78 billion (US$2.14 billion) for the financial year ended 31 March 2024. This impressive figure reflects a growth compared to S$2.68 billion in the previous year, largely driven by a one-off gain resulting from the merger between Air India and Vistara.
The merger, finalised on 12 November 2023, also secures SIA a 25.1 percent stake in Air India. This positions the airline strategically within the rapidly expanding Indian aviation market.
Operating Profit Pressured by Increased Competition
However, it’s not all smooth sailing. The airline’s operating profit saw a significant drop of 37 percent to S$1.71 billion, primarily due to lowered passenger yields—a good proxy for airfares—down by 5.5 percent. This decline can be attributed to intense competition in the aviation sector, as fellow carriers ramp up capacity.
- Net profit: S$2.78 billion
- Previous year’s net profit: S$2.68 billion
- Operating profit: S$1.71 billion (down 37 percent)
- Passenger yield drop: 5.5 percent
SIA’s employees are set to benefit from a profit-sharing bonus of 7.45 months’ worth of salary, slightly lower than the previous year’s record of 7.94 months.
Aeronautical Market Outlook
The future entails a cautious outlook for the aviation industry. SIA highlighted various challenges ahead, including shifting tariff policies, economic uncertainties, and rising operational costs. The airline warned these factors could dampen both business and consumer confidence, potentially affecting both passenger and cargo markets.
Despite these challenges, SIA maintains optimism about its diversified global passenger and cargo networks, indicating potential for growth as global trade flows evolve.
Dividend & Future Strategy
In light of its annual performance, SIA declared a final dividend of 30 cents per share, a decrease from the previous year’s 38 cents. As the airline navigates this complex environment, it remains committed to focusing on profitability while pursuing sustainable growth strategies.