- SIA (SGX:C6L) reported a 1.5% y-o-y increase in 1QFY26 group revenue to S$4.8b. Passenger flown revenue rose 0.9% y-o-y to S$3.9b.
- Traffic growth of 4.1% exceeded capacity expansion of 3.3% as air travel demand remained robust; as a result, passenger load factor (PLF) improved 0.7 percentage points (ppt) to 87.6%, notwithstanding a 2.9% dip in passenger yields.
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Group expenditure outpaced revenue growth for the period, increasing 3.2% y-o-y to S$4.4b.
- This was driven by an 8.5% y-o-y rise in non-fuel expenditure on capacity increase and inflation. Net fuel costs were more benign, improving 7.9% y-o-y as lower fuel prices offset higher volume uplifted and a net fuel hedging loss (versus gain in 1QFY25).
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1QFY26 PATMI fell 58.8% y-o-y.
- PATMI for the quarter, however, came in 58.8% lower y-o-y at S$186m due to higher net interest expense (versus income in 1QFY25), as well as S$121.6m worth of share of losses from associates, most notably from Air India.
- This marks the first quarter in which SIA has fully accounted for Air India’s financial performance after the Vistara-Air India merger was completed in Nov 2024.
- The losses from Air India were the largest detractor for the quarter, in our view, causing PATMI to miss our expectations, even though revenue was in line (16% and 25% of our initial full year forecasts, respectively).
Cautiously optimistic that corresponding Air India share of losses will narrow over time.
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