‍CHANGI — Singapore Airlines Group (SIA) recorded its all-time-high net profit for FY2024/25, aided substantially by a one-time non-cash accounting benefit from the Air India-Vistara merger.

The Changi Airport (SIN)-base airline group recorded a net profit of US$2.78 billion, 3.9% higher than the year before, even as it also recorded reduced yields and increased industry competition.

Revenue Grows, Yields Decline

Overall, group revenue increased by 2.8% year on year to US$19.54 billion, which was led by record passenger volumes and strong demand on both the passenger and cargo fronts. SIA and its low-cost subsidiary Scoot transported 39.4 million passengers, up 8.1% from the previous year.

Passenger yields fell by 5.5% to 10.3 cents per revenue passenger-kilometer (RPK), as capacity growth outstripped traffic recovery and competition got fiercer around the world.

Passenger flown revenue accounted for US$15.85 billion, rising by a mere 1%, with the group's passenger load factor declining 1.4 percentage points to 86.6%. This occurred as capacity grew by 8.2%, while passenger traffic increased at a slower rate of 6.4%.

Cargo Business Strengthens Amid Disruptions

Cargo revenue from group flights rose by 4.4%, fueled by increased demand for perishables and e-commerce and impacts from challenges in sea freight logistics.

Cargo load factor improved by 1.6 percentage points to 56.1%, while yields fell 7.8% due to competitive pricing pressure. SIA's cargo business was aided by network flexibility and the capacity to reroute capacity into high-demand trade lanes.

Operating Profit Falls Under Cost Pressure

Group spending rose 9.5% to US$17.83 billion, with non-fuel expenditures rising 11% due to capacity growth and inflationary pressures. Even with cost control measures, such as digitalization efforts, the increase in the cost of doing business saw operating profit dip 37.3% to US$1.71 billion.

The group also saw net fuel costs rise, primarily due to volume lift and fewer hedging gains.

Strategic Gains from Air India-Vistara Merger

One of SIA's strongest bottom-line contributors was the US$1.1 billion accounting gain arising from the November 2024 consolidation of Air India (AI) and Vistara (UK).

Through this deal, SIA bought 25.1% of enlarged AI, which serves its multi-hub growth strategy and gains exposure to the rapidly expanding aviation space in India.

The second half of FY2024/25 recorded net profit rising 65% to US$2.04 billion, with revenue hitting US$10.04 billion, a half-yearly high. This performance was driven by strong seasonal travel demand and one-off merger-related benefits.

Strong Financial, Operating Platform

The group closed the financial year with a fleet of 205 aircraft, with an average age of 7 years and 8 months, and a global network covering 128 destinations. It had US$8.3 billion in cash and bank balances, backed by US$3.3 billion of undrawn credit lines.

Shareholder equity was US$15.7 billion after accounting for bond redemptions and dividend payments.

The board recommended a final dividend of 30 Singapore cents a share, bringing the total payout for the year to 40 cents a share, or US$1.2 billion.

Outlook: Growth Amid Volatility

As long as macroeconomic uncertainty and geopolitical tensions prevail, SIA anticipates sustained growth through its dual-brand strategy, strategic partnerships, and investments in fleet, lounges, and generative AI technologies.

Scheduled capacity increases on critical routes, digital transformation efforts, and infrastructure upgrades, such as lounge refurbishments and new premium cabin products, put the group in a competitive position.

Through disciplined cost management and an Asia-Pacific-anchored diversified network, SIA is well-positioned to capture future demand while protecting profitability.