SIA Group says airfares expected to 'come back down' within a few months after increasing due to travel demand
SINGAPORE: Airfares for flights on Singapore Airlines (SIA) will continue to remain high over the next couple of months amid an increase in travel demand, but are expected to "come back down" after that, a senior executive for the group said on Thursday (May 19).
"Airfares are a function of demand and supply. The reality is that flights for the next two months or so are quite booked up for many sectors, and so in those sectors, you will see higher prices," said commercial executive vice-president Mr Lee Lik Hsin.
"If you go beyond two months, the prices come back down. In fact, we regularly conduct promotions to try and get early bookings and early sales. So there are actually attractive prices out there in the marketplace; it really depends on when you need to travel and where you need to travel."
Mr Lee was speaking at a briefing one day after SIA reported a narrower annual loss of S$962 million for the year ended Mar 31, on the back of returning demand for international air travel as borders reopened in almost all key markets.
In its earnings statement on Wednesday, it also said that passenger capacity would reach 61 per cent of pre-pandemic levels in the first quarter and 67 per cent in the second quarter.
With border restrictions in Singapore and the region being eased, the travel industry is picking up after a prolonged downturn.
CNA previously reported data from travel platform Expedia showing that ticket prices were “generally higher” than in pre-pandemic days, with the average price for Singaporeans’ top five destinations up 20 per cent from 2019.
In his briefing to analysts and media on Thursday, Mr Lee said that SIA has not seen higher ticket prices trickle down to affect the lower cabin classes, but that the company will continue to be "nimble to adapting to demand and supply".
MANPOWER "ALMOST WHERE WE WERE" BEFORE COVID-19
During the briefing, SIA's management also addressed the issue of manpower, saying the group is in a "good place" to support growth.
SIA instituted a hiring freeze on all ground positions in response to the COVID-19 pandemic in February 2020, subsequently offering cabin crew early release or retirement.
It also announced in September 2020 it would cut thousands of positions across its three airlines in light of the impact of the pandemic on the aviation industry.
It resumed cabin crew recruitment earlier this year.
"Looking at the plan for growth that we have, the trajectory that we have seen, we are already now planning ahead ... We're in a good place now to support the capacity growth that we anticipate," said operations executive vice-president Mr Mak Swee Wah at the briefing.
In terms of cabin crew, SIA is operating at "60 per cent of capacity in the coming months". This will be made up of crew who have been out of operation, as well new recruits.
"The numbers that we have will be tracking the capacity that we're planning to deploy ... until the end of the year," said Mr Mak.
Responding to queries on how hiring at Changi Airport might affect SIA's own recruitment drive, chief executive officer Mr Goh Choon Phong shared that the company has been preparing for recovery "right from the start", including keeping "as many valuable resources" as possible despite having to let go of staff during the earlier days of the pandemic.
"Of course, from reports, you hear that there are constraints elsewhere. And quite frankly, we just have to work with our ecosystem partners to address this issue. There is no simple solution (but you) can be assured everybody's working towards the same goal of restoring the Singapore hub to what it was before," said Mr Goh.
CORPORATE BOOKINGS BACK ON TRACK, F1 SPONSORSHIP
When passenger recovery first started with the vaccinated travel lanes, the corporate bookings then were "slower to recover". But since April this year, when Singapore reopened, SIA has seen "a strong rebound on corporate travel", said Mr Lee.
"(For) corporate bookings, moving forward, we are seeing that the contribution is already very similar to pre-COVID. So I will say definitely that the momentum that we are seeing in our forward bookings is coming across all customer segments."
And in response to a question about why SIA was still sponsoring the upcoming F1 night race despite its financial loss, Mr Goh noted that the company made the decision after discussions with relevant parties.
"We ... arrived at the conclusion that it is a worthwhile deal for us going forward, in view of the spin-off effect it has in terms of bringing people into Singapore and also our brand exposure," he said.