Singapore Airlines Reports 2.8% Rise in Passenger Traffic Amid AI-Driven Cargo Demand

Singapore Airlines (SIA) Group reported a 2.8% year-on-year increase in passenger traffic for September 2023, carrying 3.5 million passengers, according to a bourse filing on October 15. This figure represents a 3.7% rise from the same month last year, indicating sustained demand across most regions.

Passenger capacity rose slightly faster at 3.1%, leading to a marginal decline in the passenger load factor, which slipped 0.3 percentage points to 86.8%. However, this was an improvement from August, when the load factor fell to 86.4%. The growth in passenger traffic in September follows a more modest increase of 1.5% in August, where capacity had expanded by 3.5%.

For SIA specifically, passenger traffic grew by 3% while capacity increased by 3.6%. The airline's load factor decreased by 0.5 percentage points to 85.7%, despite carrying 3.6% more passengers, totaling 2.3 million. Load factors declined in East Asia, Europe, and the South West Pacific, as capacity growth outpaced traffic. Conversely, the Americas, West Asia, and Africa saw increases in load factors.

Scoot, SIA's budget carrier, also performed well, with a 0.7 percentage point increase in passenger load factor to 90.8%. The carrier transported 1.2 million passengers, marking a 2.2% increase in passenger traffic compared to the previous year.

On the cargo front, SIA Group experienced a robust 9.4% increase in cargo loads, significantly higher than the 3.1% rise in cargo capacity. This surge was primarily driven by increased shipments of hardware for semiconductor and artificial intelligence applications. Consequently, the cargo load factor improved by 3.4 percentage points to 59.6%, with total cargo and mail carried rising 8.6% to 102.2 million kg.

As of September 30, SIA's passenger network covered 136 destinations across 35 countries and territories, with SIA serving 78 destinations and Scoot 84. Despite the positive operational results, shares of SIA closed 0.8% lower at S$6.49 on the day of the announcement.