Singapore Airlines warns competition, fuel costs to affect revenues, profitability

Singapore Airlines on Wednesday warned that a key revenue metric would remain under pressure this year as rising competition crimps average fares and higher fuel costs dent group profit.

Airlines globally have been increasing the number of flights and routes as they rebuild after the pandemic and cater to robust air travel demand, especially during the summer months.

This has resulted in heightened competition, squeezing airlines’ margins as ticket prices take a hit and fuel costs rise.

“The global airline industry continues to face challenges from increased competition, supply chain constraints, inflationary pressures on operating costs including from airports and service providers, and geopolitical uncertainties,” the airline said.

“Passenger yields are expected to stay below the previous year’s levels as more capacity enters the market, particularly in the Asia-Pacific region,” it added.

The yield, a measure of flight profitability, fell 4.6 per cent in the June quarter to 10.3 Singaporean cents per kilometre from 10.8 Singaporean cents a year earlier.