No material impact from tariffs on bookings for now: SIA CEO

Business Times

16-05-2025

[SINGAPORE] Singapore Airlines (SIA) has not seen any significant impact of the US tariff turmoil on its bookings for now, chief executive Goh Choon Phong said at its financial results briefing on Friday (May 16).
He said: 'At this point in time, based on what we can see in bookings, we do not see any significant impact, any material impact. So we are still seeing robust demand on our routes… It is really very uncertain. I don't think anybody will tell you exactly what will happen.'
However, he said the carrier group has the nimbleness and agility to manage the uncertainties ahead.
The US unleashed a tariff tsunami in early April against dozens of economies and then paused some of the tariffs, creating tremendous uncertainty – especially for cross-border shippers.
Lee Lik Hsin, chief commercial officer, pointed out that the group has a 'well-diversified' network and is thus able to adjust to constant changes in cargo flows impacted by the tariffs.
Giving an example, he said: 'In the days immediately after the implementation of the US tariff on China… we were able to fill our Singapore-USA flights with cargoes from South-east Asia rather than from China, where it was more greatly impacted.'
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Lee added that the passenger flights to the US were holding up well.
SIA had 145 passenger planes and seven freighters, while its budget airline Scoot had 53 passenger aircraft, serving the group passenger network of 128 destinations and cargo network of 132 destinations as at Mar 31.
The airline group posted on Thursday 1.9 per cent year-on-year higher revenue for the second half of FY2025 ended March to S$10 billion, breaking the half-year record of S$9.9 billion in the year-ago period.
Net profit surged 65 per cent to S$2 billion as the group chalked up a S$1.1 billion one-off, non-cash accounting gain from the Air India-Vistara merger.
In 2024, Vistara was merged with Air India, resulting in SIA holding a 25.1 per cent share in the merged entity. Vistara was a 49 per cent associated company of the Singapore airline, before the corporate action took place.
Stripped off that gain, earnings would have been 24 per cent lower year on year at S$938.1 million.
Net profit for the full year would similarly have been lower – by 37.2 per cent – at S$1.7 billion, instead of the record S$2.8 billion, without the one-off gain.
SIA's operating profit dipped 22.1 per cent to S$914 million, due to increased expenditure and lower yields.
Competition pushed yields down by 4.5 per cent for passenger and 2.1 per cent for cargo in the second half of FY2025. Group passenger load factor was 0.5 percentage point lower at 86.8 per cent, while the cargo load factor fell 1.4 percentage points to 54.9 per cent.
However, Lee commented at the Friday briefing that passenger yield erosion has slowed in FY2025 compared to the early days.
SIA, meanwhile, has not seen its mainland Chinese market recover to pre-pandemic levels, although inbound travel into the north Asian country has improved, with the load factor for Chinese flights rising to more than 80 per cent the last six months – up from about 70 per cent last year.
The full service carrier's present capacity for the mainland Chinese market is largely on a par with pre-pandemic levels, while Scoot's has recovered to about 80 per cent.
SIA shares were unchanged at S$6.88 against a 0.2 per cent dip in the Straits Times Index at 2.28 pm on Friday.