Singapore’s flag carrier serviced at least 532 flights between its home country and North America in June, according to British analytics firm Cirium, exceeding the last peak in January 2020 by about 5%.

Singapore Airlines “is the sole operator of direct flights to many destinations in the Americas,” said Jason Sum, analyst at DBS Bank, who added that the carrier “generally enjoys higher margins on long-haul flights” when seat occupancy rates are elevated.

The airline’s carrying capacity to North America – the number of available seats times the distance – was 13% higher in June than in January 2020 on growing demand for both business and leisure trips. Seat occupancy ratio hit 87% for flights to the Americas in May.

For Singapore, the US is the single biggest source of direct investments. Flights to the US accounted for 15% to 20% of Singapore Airlines’ total pre-Covid revenue, according to DBS estimates, roughly on par with greater China, its main market.

This recovery is happening while Tokyo and Seoul maintain border restrictions, giving Singapore a ripe opportunity to establish itself as the dominant gateway between North America and Southeast Asia.

Singapore has long competed as a major hub with Hong Kong, which is now seeing an exodus of companies from the US and other major economies.

Cathay Pacific, Hong Kong’s leading carrier, only serviced 130 flights to North America in June, plunging nearly 90% from January 2020 due to strict border restrictions.

A direct flight from Singapore to New York’s John F. Kennedy International Airport takes over 18 hours. In March, Singapore Airlines resumed flights to Newark Liberty International Airport, which serves the metropolitan area. Roundtrip flights to greater New York now number three a day, an all-time high for the carrier.

Singapore Airlines also operates direct flights to San Francisco and Los Angeles, and added Seattle in December. It has also reinstated flights to Vancouver for the first time in 12 years, and in April expanded its code-sharing arrangement with United Airlines to 19 cities from nine.

Singapore Airlines has been conspicuous with the pace at which it is adding flights to North America, aiming to reach 67% of January 2020’s carrying capacity for all flights by September.

Global air passenger traffic is expected to recover to roughly 80% of pre-Covid levels by the end of this year, according to the International Air Transport Association.

But airline markets in Northeast Asia are struggling to recuperate. China continues to maintain its strict zero-Covid policy and Japan is taking a cautious approach to loosening port-of-entry controls. In contrast, the US and Europe have taken the lead in resuming air service.

North American airlines are projecting returns to profit for the current financial year and Singapore Airlines looks to take part in that momentum.

Here, especially amid cooling relations between the US and China, Singapore Airlines will flex its strength in executing smooth layovers in Asia.

Last year, the carrier expanded its code-sharing network with Malaysia Airlines. It is also partnering with flag carrier Garuda Indonesia on sales promotions. The relaxed border restrictions throughout Southeast Asia have been a boon for business.

Because it serves a city-state, Singapore Airlines does not fly domestic flights. When the pandemic devastated demand for international travel in 2020 and 2021, the carrier found itself at a significant disadvantage in terms of recovering from the blow.

Things began to turn around when the Singapore government opened a quarantine-free travel corridor in September of last year. To make up for lost time, Singapore Airlines rushed to restore flights.

The airline’s financial cushion underpinned the recovery efforts. It secured S$15 billion (US$10.5 billion at the time) in funds from its main investor, state-owned Temasek Holdings, in March 2020.

Other regional rivals were not so lucky. Thai Airways International and Philippine Airlines both filed for bankruptcy protection, while the parent of Malaysia’s AirAsia, Capital A, is in danger of delisting due to troubled finances.

Despite the dramatic rebound in flights, Singapore Airlines is not out of the financial woods. The price of fuel, which accounts for about 30% of the company’s expenses, has doubled over the past year. That has contributed to Singapore Airlines turning in a S$962 million for the fiscal year ended March, its third straight year in the red.

The carrier could raise ticket prices to absorb the additional expenses, but that could throw cold water on travel demand.

“Airfares are a function of demand and supply,” said executive vice-president Lee Lik Hsin. In other words, the automated pricing system does not pass on the extra cost of fuel to ticket prices.

The carrier also faces challenges on the staffing front. It laid off 2,000 employees during the height of the pandemic, and is now looking to hire 2,000 cabin attendants this fiscal year to avoid hiccups seen in Western markets.

Singapore Airlines’ large lead on Cathay Pacific may be only temporary, according to Brendan Sobie, an aviation market analyst.

“I suspect the competitive dynamics we saw pre-Covid will return at some point once all the North Asia hubs reopen,” said Sobie.