Singapore Airlines Reports Solid First Half, Sees Dip in Net Profits

The Singapore Airlines Group has experienced a notable decline in first-half profits, primarily due to losses from its Indian partner, Air India, increased expenses, and heightened competition. In the second quarter, the airline’s net profits plummeted to $40.18 million, a sharp drop from the $139.5 million reported in the first quarter, underscoring the challenges posed by Air India’s performance.

Singapore Airlines began accounting for Air India’s earnings in December 2024 after integrating the joint venture Vistara into Air India. They hold a 25.1% stake in the Indian airline. Despite robust passenger demand and lower fuel costs, escalating competition in critical markets has pressured yield rates.

Group revenue rose by $178 million, marking a 1.9% increase from the previous year, achieving a first-half total of $9.675 billion. Air travel demand has remained strong, with Singapore Airlines and Scoot together carrying 20.8 million passengers, a year-over-year increase of 8%. The group’s passenger load factor (PLF) rose by 1.3 percentage points, reaching 87.7%, driven by a 4.6% traffic growth that surpassed a 3.0% expansion in capacity.

However, passenger yields declined by 2.9%, now sitting at 7.4 US cents per revenue passenger-kilometer due to intensified competition.

The Group reported a rise in expenditure by $170 million, equating to a 2.0% increase, taking their total to $8.872 billion. This was mainly due to a 5.9% increase in non-fuel expenditures, which outweighed a reduction in net fuel costs. The impact of inflation was also felt across various cost elements.

Net fuel costs dropped by 6.7%, primarily because of a 12.7% reduction in fuel prices, although this was slightly offset by increased flight volumes and a loss from fuel hedging efforts this year. As a result, the Group recorded an operating profit of $803 million for the first half of FY2025/26, a slight increase compared to the prior year. Conversely, the overall net profit for the first half decreased significantly by $503 million, or 67.8%, falling to $239 million.

Interest income saw a decline of $103 million due to lower cash reserves and interest rate cuts. Additionally, the Group noted that their share of associated companies’ results decreased by $417 million year-on-year, largely attributable to Air India’s losses, which had not been accounted for in the previous fiscal year.

With the full integration of Vistara into Air India, equity accounting for Air India’s financial performance started in December 2024. Following a tragic plane crash in June 2025, Air India is reportedly seeking financial assistance from the Group.

SIA’s net profit fell by 67.8% year-over-year, landing at $239 million for the first half of their financial year that concludes on 30 September 2025. Despite the drop in profits, the airline’s revenue increased by 1.9% during this six-month period, reaching a record $9.7 billion, as the demand for air travel remains robust despite challenges from evolving trade policies. Shareholders can expect the first interim special dividend of three cents per share on 23 December 2025.

The company anticipates that, barring unforeseen circumstances and subject to shareholder approval, it will pay special dividends of 10 cents per share in each of the next two financial years.

On another note, revenue from SIA’s cargo division dipped in the first half of the year. Although cargo loads rose by 1.2%, this was overshadowed by a 2.8% increase in capacity. The airline has expressed concerns over the cargo segment, citing pressure on yields resulting from a shift in capacity from the United States to other routes, despite rising volumes.

As of 30 September 2025, the Group boasted a fleet of 208 passenger and freighter aircraft, averaging seven years and eight months in age. In the second quarter, Singapore Airlines added three Boeing 737-8s, bringing the count of passenger aircraft to 145, alongside seven freighters. Additionally, they recently retired the last of their 737-800 fleet.

Meanwhile, Scoot welcomed two Airbus A320neos, one Boeing 787-8, and one Embraer E190-E2, thus expanding its fleet to 56 passenger aircraft. Currently, the Group has 67 more aircraft on order.

Looking ahead to the Northern Winter 2025/26 operating season, which spans from 26 October 2025 to 28 March 2026, Singapore Airlines plans to increase flight frequencies to numerous destinations, including Auckland, Busan, Da Nang, Kathmandu, Kochi, Phuket, Siem Reap, and Tokyo (Haneda), in response to higher demand during the year-end peak. They will also introduce supplementary services to Chitose, Christchurch, and Taipei to cater to this increased demand.

How do you think these changes will affect the airline’s future performance and growth?