SINGAPORE – In a surprising turn of events, Singapore Airlines (SIA) chief executive Goh Choon Phong has witnessed a significant pay cut of 13.5%, reducing his annual earnings to an impressive $7.01 million. This shift occurred even as the airline celebrated record-breaking earnings for the financial year ending March 31.

The details of Mr. Goh's remuneration package, revealed in SIA's annual report released on June 25, show his compensation included a $1.46 million basic salary, $3.12 million in bonuses, and $2.29 million in shares, along with additional benefits totaling over $145,000.

Record Profits and Salary Cuts: What's Behind the Numbers?

Despite this pay reduction, Mr. Goh's previous remuneration for FY2023-2024 was reportedly $8.1 million. Meanwhile, his senior executives, Chief Commercial Officer Lee Lik Hsin and Chief Operations Officer Tan Kai Ping, received between $3 million and $3.2 million for FY2024-2025, a slight drop from their earlier compensation of $3.5 million to $3.75 million.

SIA's financial triumph is noteworthy, posting a net profit of $2.8 billion for FY2024-2025, a modest increase from $2.7 billion the previous year. The airline managed to reward its employees with profit-sharing bonuses accrued over 7.45 months, a decrease from 7.94 months in the prior year.

The Impact of Strategic Moves: Air India Merger and Market Dynamics

A significant factor in SIA's astonishing profits was a one-off non-cash accounting gain of $1.1 billion due to the merger between Air India and Vistara. SIA now boasts a 25.1% stake in the expanded Air India Group, making it the only non-Indian airline to participate directly in this rapidly growing aviation market.

Additionally, SIA's group revenue soared by 2.8%, reaching an all-time high of $19.54 billion, fueled by strong demand for air travel and soaring cargo shipment.

Passenger Numbers Surge, Yield Dips: A Complex Landscape

SIA and its budget arm, Scoot, reported carrying a record 39.4 million passengers, which marks an 8.1% increase. However, the airline faced challenges as passenger yields—the earnings per passenger per kilometer—fell 5.5% to 10.3 cents. This decline is attributed to fierce competition and an influx of capacity across the industry.

Interestingly, the passenger traffic growth of 6.4% was outpaced by a capacity expansion of 8.2%, suggesting SIA is navigating a complex and competitive landscape.

Cargo Revenue Rises Amid E-commerce Boom

Meanwhile, SIA's cargo revenue improved by $94 million, a 4.4% increase, thanks to rising demand in e-commerce and perishables, as well as ongoing challenges in sea freight logistics.

In a rapidly evolving aviation sector, Singapore Airlines is not just soaring high in profits but is also making strategic moves that position it favorably for future growth.