Corporate sector drives yield and profit improvement at Singapore Airlines

Singapore Airlines (SIA) recorded the first yield increase in several years in 1Q2018, driven partially by improved demand from the corporate sector.


  • Corporate demand has increased at Singapore Airlines across all regions
  • SIA yields have stopped declining and increased in February and March for the first time since 2015
  • SIA profitability also has improved at both the airline and group level

SIA’s average passenger yield dropped by 1% in the fiscal year ending Mar-2018 (FY2018) to SGD10.2 cents (USD7.6 cents) per passenger kilometer. This represented the third consecutive year of yield declines for SIA the parent airline since FY2015, when SIA’s average yield was SGD 11.2 cents.

However, the yield decline moderated during FY2018 and SIA’s average yield actually increased in the quarter ending Mar-2018 by 1% to SGD10.3 cents. SIA’s yield declined in Jan-2018 but increased in Feb-2018 and Mar-2018.

The increases in February and March were the first monthly year over year increases in passenger yield for SIA since Dec-2015. While SIA’s yields are still well below historical levels, the performance from 1QCY2018 provide an indication that market conditions are improving.

“We are quite happy to see that the yield decline has bottomed out.,” SIA EVP commercial Mak Swee Wah said at SIA’s FY2018 results briefing on 18-May-2018. “In fact, there was an uptick in the last quarter. I think we can attribute this to two things. In general the market has been quite healthy.”

Mr Mak added the two drivers behind the yield increase in the last quarter were a surging global economy and an “improvement in the corporate market, which is rather broad-based both across industries as well as across regions.”

In addition to the yield improvement, SIA was able to slightly increase its load factor in the quarter, from 80.6% in 1QCY2017 to 81.1% in 1QCY2018. RPKS were up by 1.4%, outpacing a 0.8% increase in ASKs.

SIA the parent airline was able to post an operating profit of SGD137 (USD102 million) for the quarter compared to an operating loss of SGD41 million in the same quarter last year – despite higher fuel prices. For the fiscal year, SIA the parent airline recorded a 82% increase in operating profit from SGD386 million to SGD703 million.

The SIA Group, which also includes low cost subsidiary Scoot and regional subsidiary SilkAir, turned an operating profit for the year of SGD1.057 billion. This marked the first time since FY2011 that the groups’ operating profit exceeded SGD1 billion.