This article first appeared on GuruFocus .
Singapore Airlines ( SINGY ) delivered a notably stronger third quarter as travel demand continued to build, pushing operating profit up 26% to S$792 million in the three months ended Dec. 31, marking its third-highest quarterly performance on record. Revenue increased 5.5% to S$5.5 billion, while yield a key measure of fares and flight profitability rose for the first time in three years. Management characterized fourth-quarter travel demand as healthy, signaling that current booking trends could remain supportive if conditions hold.
The group has continued expanding capacity and services, and is preparing to introduce the first of several dozen aircraft equipped with new seats under a S$1.1 billion retrofit program. In December, Singapore Airlines exceeded both capacity and passenger volumes compared with January 2020, reaching a post-pandemic milestone. Combined, Singapore Airlines and its budget unit Scoot carried 10.9 million passengers during the quarter, up 6.3% from a year earlier. That level of demand helped offset a 2.7% increase in quarterly costs, suggesting operating momentum has, at least for now, absorbed cost pressures.
At the same time, headwinds remain. The airline recorded S$178 million in losses from associated companies in the quarter, largely linked to Air India Ltd., in which Singapore Airlines holds a 25.1% stake. Bloomberg News has reported that Air India is heading toward a record $1.6 billion full-year loss following last year's deadly crash and airspace shutdowns. Singapore Airlines said it is firmly committed to supporting Air India's transformation alongside Tata Sons. Management also cautioned that unpredictabilities in global trade and geopolitics are clouding the outlook for cargo, noting the group will leverage its network to adapt. Shares closed 1% higher Tuesday, while Cathay Pacific rose 4.1% after JPMorgan upgraded both carriers to overweight.
