Post by : Badri Ariffin

Singapore Airlines (SIAL.SI) reported its first quarterly net loss since 2022 after higher jet fuel costs and losses from its associate Air India outweighed record revenue during the first quarter.

The airline announced a net loss of S$76 million (US$58.79 million) for the three months ended June 30, compared with a profit of S$186 million during the same period last year. The result was significantly weaker than the LSEG estimate, which had forecast a loss of S$4.3 million.

This marks the first quarterly loss for Singapore Airlines since the fourth quarter of the 2021/22 financial year, which ended on March 31, 2022, during the COVID-19 pandemic.

Higher Fuel Costs Hit Airline Earnings

The airline said the sharp rise in fuel expenses was the biggest factor behind the weaker financial performance.

Net fuel costs increased 78.5% to S$2.25 billion after jet fuel prices climbed following the outbreak of the Middle East conflict on February 28. Before fuel hedging, fuel costs more than doubled during the quarter.

As a result, the airline's operating profit fell 73.8%, ending the quarter at S$106 million.

Air India Investment Adds to Losses

Singapore Airlines' quarterly result was also affected by its investment in Air India.

The carrier recorded a S$42 million negative impact from its higher share of losses in Air India, where Singapore Airlines owns a 25.1% stake.

On Monday, Tata Sons, the majority owner of Air India, said the airline's turnaround could take as long as 10 years.

Passenger and Cargo Revenue Reach New Highs

Despite the financial loss, Singapore Airlines achieved record quarterly revenue of S$5.71 billion, an increase of 19.3% compared with a year earlier.

The airline said the growth was driven by strong passenger demand and a 12% increase in passenger yields.

Singapore Airlines and its low-cost subsidiary Scoot carried a record 10.9 million passengers, representing a 6.3% increase from the previous year.

Cargo operations also performed strongly, with cargo revenue rising 33.5% to S$708 million, supported by stronger yields and higher cargo loads.

Global Airline Industry Faces Similar Challenges

Singapore Airlines said demand for both passenger travel and air cargo continues to remain strong.

However, the airline warned that a prolonged Middle East conflict could disrupt supply chains, affect global trade, and weaken broader economic conditions.

The company's performance also reflects wider pressures across the global airline industry, where carriers in the United States and Asia have reported that strong travel demand and improving passenger yields are no longer enough to fully offset the impact of rising fuel costs caused by the conflict in the Middle East.

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