SIA's first-quarter profits fall by 59%; airline group sees volatile times ahead

Straits Times

6 days ago

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The fall in profits was due to lower interest income and share of losses of associates.
SINGAPORE - Singapore Airlines saw its profits slide 59 per cent in the first quarter of its latest financial year, it announced on July 28 after trading hours.
This was due to lower interest income and share of losses of associates, SIA said. Net profit dropped to $186 million for the first quarter in the 2025/2026 financial year that ended June 30, down from $452 million in the corresponding period a year ago.
'In addition to the lower operating profit, the reduction in net profit was largely attributable to a lower interest income on the back of lower cash balances and interest rate cuts, and the group recording a share of losses of associated companies compared to a share of profits for the same quarter last year,' SIA said.
This loss was from Air India's financial results which were not part of the group's results for the same quarter in 2024. SIA started equity accounting for Air India's financial performance from December 2024 following the
full integration of Vistara into Air India .
Before the merger, Vistara was jointly owned by Tata Sons and SIA. After the merger, SIA holds a 25.1 per cent stake in the enlarged Air India, allowing it to participate directly in the fast-expanding Indian aviation market.
SIA's operating profit fell around 14 per cent year on year, to $405 million.
But group revenue climbed 1.5 per cent in the three months that ended June 30.
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'Despite economic and geopolitical uncertainties across the network, demand for air travel and cargo remained strong,' SIA said.
SIA and Scoot carried a record 10.3 million passengers, up 6.9 per cent from the same quarter last year.
But passenger yields – the amount earned per passenger for each kilometre flown – slipped 2.9 per cent to 10 cents per revenue passenger-kilometre. This was due to heightened competition as more airlines continue to add capacity, SIA said.
Despite healthy demand for air travel in the second quarter due to the traditional summer peak season, SIA sees volatile times ahead.
It said: 'The global airline industry continues to face a volatile operating environment, with challenges ranging from geopolitical developments and macroeconomic fluctuations to changing market dynamics and supply chain constraints.
'The group will be agile and proactive in responding to changes in demand patterns.'
Its cargo business is also affected by tariffs announced by US President Donald Trump. A 90-day truce was announced on tariffs, which was meant to end in July, but was extended till Aug 1.
'Ongoing tariffs have led to unpredictable and uncertain demand,' SIA said.
'The group's diversified network and verticals reduce its exposure to specific regions or market segments, and will continue to adapt its capacity and seize opportunities as they arise.'
It added that it will remain vigilant in this operating environment, while identifying emerging areas of growth.
SIA also said its strong balance sheet, workforce and digital capabilities put it in good stead to maintain its industry-leading position.
SIA announced recently that it
will ramp up capacity to various Asian destinations in Malaysia, the Philippines, Sri Lanka and Thailand, given the closure of Jetstar Asia on July 31.
This includes Scoot starting operations to Labuan Bajo and Medan in Indonesia, as well as Okinawa, subject to regulatory and operational approvals.
'In addition, the group has worked closely with Jetstar Asia to accommodate affected passengers and offer employment opportunities to impacted staff, where possible,' SIA said.
Scoot has also
announced plans to launch services to Da Nang in Vietnam and Kota Bharu in Malaysia in October, as well as Nha Trang in Vietnam in November.
As at June 30, the group's passenger network covered 129 destinations in 37 countries and territories. Its operating fleet comprised 204 passenger and freighter aircraft with an average age of seven years and nine months.
SIA operated 144 passenger aircraft and seven freighters, while Scoot operated 53 passenger aircraft. The group also has 72 aircraft on order at the end of this quarter.
SIA shares closed up by 0.4 per cent at $7.60 on July 28.