Singapore Airlines forecasts steady growth despite the slow recovery process post-pandemic era. The pace of change seems slow, considering travel restrictions have been removed.
When analyzing Singapore Airlines and other airlines, new post-pandemic patterns have emerged, prioritizing load aspects ahead of capacity and a more careful strategy for growth.
The slow pace of post-pandemic recovery
In December last year, Singapore Airlines came close to reaching pre-pandemic levels of passengers. Singapore Airlines Group, including Singapore Airlines and Scoot, served 2.689 million passengers, representing a passenger load factor (PLF) of 89.7%, more than four times the capacity of passengers they carried in December 2021. Although, in December 2019, the group served 3.543 million passengers at a PLF of 87.6%. This December’s performance means that numbers recorded last month had recovered to 76% of pre-pandemic levels.
The PLF measures the utilization of services the carrier runs and is often used by airlines to assess their efficiency and generate their fare prices.
Singapore Airlines Group stated,
“Capacity was 6.9% higher in December 2022 compared to the prior month, reaching 80% of pre-COVID-19 levels during the month.”
Holding Back On Capacity
Airfares have been increasing over the years, making air travel too costly for many, yet carriers are holding back capacity to maintain their load factors during their all-time highs. In Australia, the competition authority took an extra step to warn airlines not to restrain their ability as a tool to increase airfares unreasonably.
As of December 2022, Singapore Airlines Group had 177 aircraft in operation out of their total fleet of 213. Singapore Airlines has so far listed 25 aircraft as inactive, with some sitting on the ground, including 15 Boeing 777ERs, two Airbus A350s, and two A380s.
The resumption of travel in North East Asia, which is currently taking hold in China, has contributed to the increase of load factors in the region nearly identical to those recorded in 2019. Singapore Airlines recorded a passenger load of 89.1% in December 2022 compared to 87.5% and 88.7% in December 2019.
If airlines break ranks in 2023, increase capacity and reduce fares to fill seats, carriers such as Singapore Airlines will move toward full recovery.
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