Singapore Airlines Eyes Potential Drop in Passenger Yields for 2023
In a candid chat on the earnings call, Singapore Airlines Executive Vice‑President for Commercial, Lee Lik Hsin, told analysts that the company expects passenger yields—the money the airline gets per seat—to dip this year. The dip comes as rivals like AirAsia and Malaysia Airlines push out their down‑tuned passenger planes that lay idle during the pandemic, adding fresh capacity to the market.
Key Takeaways From the Call
- Fare outlook: Lee said their yields “would not stay at the same elevated levels we were at in 2022.”
- Strong second quarter: The airline swung into profit in Q2 and paid its first dividend in three years, riding a strong rebound in travel demand.
- Capacity still below pre‑pandemic: In Q2 SIA operated only 68 % of its 2019 passenger capacity, yet revenue hit a record.
- Yield trend: Passenger yields across SIA’s group of airlines were 32 % higher in Q2 2023 compared with the same quarter in 2019.
- Demand head‑to‑head: Demand remained solid through the Lunar New Year holiday in January, but it’s still early to say how the market will behave afterward.
- Fuel & inflation worries: Higher fuel costs, supply‑chain inflation, geopolitical uncertainties and a looming recession are looming threats.
Stock Market & Future Moves
Airline shares ticked up 1.5 % by 03:15 GMT on Monday, and had even surged closer to 3 % at one point. The second‑quarter earnings had actually come out after the market closed on Friday, meaning the fresh numbers were only just starting to ripple through the market.
On the recruitment front, SIA plans to bring in another 800 cabin crew, tapping talent pools in South Korea, Thailand, and Taiwan—because good service is the glue that keeps passengers coming back.
All in all, Singapore Airlines is navigating a changing landscape: travel demand is still burning hot, but competition is heating up, and the airline’s financials seem sturdy enough to weather the storm—if not some of the turbulence.
