Singapore Airlines will grant its employees a bonus equal to 7.45 months of base pay after reporting a record net profit for the fiscal year ending March 31, 2024. This decision follows a strong financial performance, primarily driven by a one-time gain related to its investment in the Indian market.
The airline announced a net profit of S$2.78 billion (US$2.14 billion) for the 12-month period, compared to S$2.68 billion the year before. The increase in earnings was supported by a one-off gain of around S$1.1 billion, following the completion of the merger between Air India and Vistara, in which Singapore Airlines holds a 49 percent stake. The merger was finalized on November 12, 2023.
Despite the profit increase, Singapore Airlines experienced a decline in operating profit, which dropped by 37 percent year-on-year to S$1.71 billion. The decline was due to a 5.5 percent fall in passenger yields, reflecting lower average airfares amid growing competition as global airline capacity expanded. Although demand for travel remained strong and the airline carried a record number of passengers, rising fuel costs and operating expenses affected profit margins.
Singapore Airlines confirmed that tens of thousands of its employees will receive the 7.45-month bonus, a reward aligned with the company’s long-standing agreement with staff unions. “This is based on a long-standing formula that has been agreed with our staff unions,” Singapore Airlines stated in response to queries from CNA.
In the previous fiscal year, the company distributed a profit-sharing bonus equivalent to 7.94 months of base pay, which marked the highest amount in the airline’s history. The latest bonus remains substantial and reflects the continued commitment to recognize employee contributions even amid tighter margins.
Challenges in cargo and future outlook
Although the airline faced reduced freight yields, its cargo revenue rose by 4.4 percent. The increase was driven by strong demand for e-commerce and perishable goods, as well as disruptions in Red Sea shipping. However, freight yields fell by 7.8 percent due to growing competition in the market.
Singapore Airlines acknowledged potential challenges ahead, noting that new US-led tariffs could impact both consumer and business confidence. The company also warned that these trade measures might affect passenger and cargo demand. Other carriers have echoed similar concerns, with some, like American Airlines and Delta, withdrawing their forecasts, while Cathay Pacific noted expected declines in cargo traffic between mainland China and the United States.
In terms of shareholder returns, Singapore Airlines declared a final dividend of 30 Singapore cents per share, lower than the 38 cents declared a year earlier.
Expanding in the Indian market and preparing for uncertainty
The completion of the Air India-Vistara merger has given Singapore Airlines a 25.1 percent stake in Air India. This allows the group to take part directly in the rapidly growing Indian market. The company said it remains ready to adapt to future developments, adding that it plans to use its broad passenger and cargo network to identify opportunities as global patterns shift.
Singapore Airlines commented on the outlook, saying that “the global airline industry faces a challenging operating environment amid changing tariff policies and trade tensions, economic and geopolitical uncertainties, and continued supply chain constraints.” The company added that “while global uncertainties remain, the Group is in a strong position to focus on profitability, while pursuing growth opportunities and ensuring long-term value creation for shareholders.”
The airline confirmed it will keep monitoring market conditions to respond quickly and effectively when necessary.
