Significant customer wins by the airline caterer include Cathay Cargo, Emirates SkyCargo and Riyadh Air 

 

AIRLINE caterer Sats grew its Q1 earnings 9.1 per cent to S$70.9 million for the first quarter ended June, boosted by growth in aviation cargo and food service volumes. 

 

Revenue for the quarter was up 9.9 per cent to S$1.5 billion. Of this, S$1.18 billion came from gateway services, 11.2 per cent higher than in the year-ago period, due to a larger customer portfolio.

 

Significant customer wins included carriers Cathay Cargo, Cathay Pacific, Emirates SkyCargo, Riyadh Air and Turkish Airlines.

 

Sats&rsquo chief executive Kerry Mok in a statement on Wednesday (Aug 20): &ldquo Our recent hub management agreement with Riyadh Air further highlights our ability to grow in spite of a volatile environment.&rdquo

 

Sats&rsquo food solutions revenue rose &ndash by 5.6 per cent to S$328.3 million &ndash thanks to the sustained growth in air travel and in-flight meal demand.

 

With the higher business volumes, the company&rsquo s operating expenditure for the quarter, excluding depreciation and amortisation, rose 9.9 per cent to S$1.2 billion.

 

Looking ahead, Sats expects gateway services revenue to remain resilient, supported by its business mix and global network.

 

The company also expects the food solutions unit to continue benefiting from growing demand for high-quality aviation meals in the region.

 

Sats noted that the International Air Transport Association (Iata) has indicated a more measured rate of expansion in global cargo and passenger markets, due to tariffs and trade and operating conditions. However, the company expects to continue outperforming benchmarks.

 

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&ldquo Building on the momentum of Q1, we remain focused on enhancing profitability, strengthening cash flows, and maintaining disciplined capital management,&rdquo said Sats.

 

&ldquo The company continues to invest in higher-margin specialised services and strategic partnerships to reinforce our position for long-term, sustainable growth,&rdquo it added. 

 

SATS, under its subsidairy, SATS Saudi Arabia Company, has signed a five-year partnership with Saudi Arabia' s flag carrier, Riyadh Air, to provide cargo handling services at key airports across the country.

 

The agreement will cover major cargo operations at Riyadh Air' s hub at King Khalid International Airport (RUH), as well as other airports including King Fahd International Airport (DMM) in Dammam and King Abdulaziz International Airport (JED) in Jeddah.

 

As part of the agreement, SATS will develop hub management capabilities for the airline, which in turn supports Saudi Arabia' s Vision 2030 objective of handling 4.5 million tonnes of air cargo annually.

 

The cargo handler will provide comprehensive services at Riyadh Air' s existing 60,000 square-metre airfreight terminal, featuring facilities such as a specialised zones for pharmaceuticals, e-commerce, live animals, valuables and dangerous goods. The partnership also grants Riyadh Air instant access to SATS&rsquo extensive global network of over 225 stations, supported by over 250 airline partners and leading freight forwarders.

 

To support these hub operations, SATS will deploy its proprietary COSYS+ Next Generation Cargo Management System, enabling real-time tracking and data-driven decision-making. The system will be enhanced by advanced cargo digitisation technology

and automated truck dock management systems to further increase operational efficiency.

 

These technological advances will be complemented by the facility&rsquo s scalable infrastructure, ensuring robust capacity to support Riyadh Air&rsquo s long-term growth ambitions.

 

Bob Chi, SATS Chief Executive Officer (CEO) Gateway Services Asia-Pacific says: " This partnership represents strategic alignment between Riyadh Air&rsquo s ambition to connect over 100 destinations globally by 2030 and our commitment to provide our customers with world-class air cargo solutions.&rdquo

 

" This partnership with SATS Saudi Arabia marks a pivotal milestone in Riyadh Air&rsquo s journey to become a leading global carrier. By leveraging SATS&rsquo advanced cargo handling capabilities and global network, we are laying a strong foundation to build a world-class air cargo offering from day one," adds Adam Boukadida, Riyadh Air Chief Financial Officer (CFO).