Employees at Singapore Airlines are set to get a major payout when their annual bonus hits this year.
The airline plans to give its employees bonuses that amount to around eight months’ worth of their salaries, according to CNN.
It's been a tumultuous time for the airline industry. Boeing’s safety woes at the start of the year have rocked an industry that lives or dies by consumer confidence. A procession of whistleblowers alleged a culture of rampant corner-cutting, which led to the oversights that caused several plane malfunctions. Even before that, the airline industry in the U.S. suffered turbulence from a lack of capacity, resulting in widespread delays and cancellations during spring and summer’s peak travel season. Most notably, Southwest’s booking system crashed in December 2022 following a winter storm, leading to 16,900 cancellations. The airline was later forced to pay $140 million in fines for the incident.
Yet Singapore Airlines seems largely unaffected by the troubles plaguing its industry peers. Earlier this week, the airline reported its best ever financial performance with $1.9 billion in net profits from $14.1 billion in revenues for its fiscal 2024. The company also had a record performance in 2023, which earned employees a similarly lucrative bonus.
The company did not immediately respond to a request for comment.
Singapore Airlines’ two years of exceptional financial performance come on the back of positive macro trends. As the city-state of Singapore has emerged from the pandemic largely unscathed and continues to grow, so does its national airline’s business. As a luxury carrier, Singapore Airlines also benefits from the latest industrywide trend that’s seen consumers reward fancier carriers over those with threadbare amenities. So much so that, the likes of Singapore Airlines have spooked stodgy incumbents into trying to copy its brand of ubiquitous comfort.
In recent years, Singapore Airlines has become known for its plush aircraft and amenities. Its first-class travel packages include a private suite, akin to a sleeper cabin on a train, that runs around $23,000. Even the less expensive tickets on Singapore Airlines come replete with small comforts like a selection of champagne and comfortable pillows.
Another airline with a reputation for luxurious travel accommodations also had a second consecutive blowout year. Emirates airlines, from the United Arab Emirates, gave its employees a bonus earlier this month worth 20 weeks of pay. Last year, employees received even bigger bonuses that amounted to 24 weeks of pay.
Across the industry, luxury airlines have been beating out their more traditional competitors by offering more amenities, at more affordable prices than they could. A crop of new luxury players, many of whom are based in smaller countries like the Maldives and Bermuda, have forced the legacy airline to play catch-up, and major American airlines are planning to increase their premium cabin space from 25% to 75% on some of their planes.
Adding more wind to their sails both Emirates and Singapore Airlines were helped by the strong economies in their home countries. The UAE’s economy has impressed in recent months for its ability to weather the storm of geopolitical turmoil. Much of that can be attributed to the oil-rich country’s effort to diversify its economy, in which a national asset like an airline plays a major role. That push has yielded healthy results so far. In April the UAE reported it had a respectable GDP growth rate of 3.3% in the first nine months of 2023.
Meanwhile, Singapore, one of Asia’s major financial hubs, has been considered an economic miracle since it was founded in 1965 as a small city-state at the tip of the Malaysian Peninsula. This year its economy is expected to strengthen mostly on the back of its numerous electronics exports. During the pandemic, Singapore was able to remain somewhat buoyant economically by attracting foreign investment and several vaccine plants.
All that put Singapore in a position to get a fast start out of the gate when the once pandemic-era restrictions were lifted in 2022. Singapore Airlines in particular was in need of a turnaround after having suffered its worst losses in history during the pandemic. In a three-month stretch from July to September 2020 the airline lost $1.75 billion.
Now, the rebound appears all but complete. As of March the airline reported that its number of passengers was 97% of pre-pandemic levels. There's reason to believe those numbers could yet improve. The company’s CEO Goh Choon Phong said on Thursday that travel out of China hadn’t yet returned to the same level as before the pandemic.
