Rising jet fuel costs, inflation offset SIA’s strong revenue

Brent price is at $174 (US$125) per barrel of crude oil.

Pricier fuel costs remain a risk for Singapore Airlines (SIA) Group even as its revenue momentum “looks solid” on the back of travel recovery, capital market firm, CGS-CIMB, said.

On revenue, SIA group’s main carrier and budget airline, Scoot, are in an “undoubtedly strong position” as it continues to launch flights quickly to take advantage of travel demand revival.

“The SIA group also kept the majority of its crew intact, although it has had to start recruitment and training of new cabin crew from early-May 2022 in order to facilitate additional schedule reinstatement,” the CGS-CIMB also noted.

However, CGS-CIMB explained that inflationary pressures, as well as rising jet fuel prices, continue to become a risk for SIA Group.

As SIA’s competitors ramp up their capacity deployment, SIA’s heightened market share could recede to 2019 averages, which may cause current high airfares to moderate whilst fuel cost remains high.

Source : https://www.msn.com/en-sg/money/topstories/rising-jet-fuel-costs-inflation-offset-sias-strong-revenue/ar-AAYtKsS?li=AAavKXU