It might only be one month’s operating results, but the Singapore Airlines Group of carriers managed to fill more seats with paying customers than it added to the market across its full service and low fare brands in June.
If continued in coming months this will be a significant change of direction for a major player in the Asia-Pacific airline sector, something other carriers are very keen to achieve in their own operations after months of reporting slowing activity and concerns about supply growing faster in some sectors than demand.
Singapore Airlines doesn’t tell us whether profit margins on these improved load factors have also grown, or been satisfactory. Its filing shows it headed upward in its operational performance while major rival Cathay Pacific continues to flag unsatisfactory results, although with different hub airports, and some very different market realities, the varying fortunes of two of Asia’s most recognised airline brands don’t lend themselves to deeply meaningful comparisons on a like for like basis.
This is the core of the SIA Group announcement:
In June 2017, SIA Group airlines’ passenger load factor (PLF) improved 4.6 percentage points to 82.7%. Passenger carriage (measured in revenue passenger kilometres) increased 8.6% compared to last year, outpacing capacity (measured in available seat kilometres) expansion of 2.7%.Singapore Airlines’ passenger carriage increased 5.4% compared to the previous year, against a capacity contraction of 0.9%. PLF improved 4.9 percentage points to 82.7% due to higher passenger carriage registered for all regions, in particular on the Kangaroo routes. The restructuring in the Americas network, and the increase in passenger volume across all routes in West Asia and Africa, also led to higher PLFs in the respective regions. The competitive landscape remains challenging and promotional efforts will continue in relevant markets.SilkAir’s systemwide passenger carriage grew 23.9% year-on-year, surpassing capacity growth of 14.3%. Consequently, PLF improved by 5.7 percentage points to 73.8%. Strong growth in demand exceeded capacity injections across East and West Asia.Budget Aviation Holdings (BAH) recorded a 17.8% year-on-year increase in systemwide passenger carriage, exceeding capacity expansion of 14.7%. Consequently, PLF improved by 2.3 percentage points to 85.8%. Demand on routes to Thailand, India and Australia, as well as fifth freedom routes to North Asia, continued to improve. During the month, BAH launched its maiden European long-haul service to Athens.Overall cargo load factor (CLF) was 4.5 percentage points higher with growth in cargo traffic (measured in freight-tonne-kilometres) of 7.2% against capacity reduction of 0.2%. CLF improved across all regions as demand outpaced capacity changes.