- Singapore Airlines’ (SIA) headline net profit of S$52m (-82% y-o-y, -72% q-o-q) came in within our guided range of S$30m-130m.
- The earnings drop was mainly due to expanded loss-making position of Air India (estimated at about S$300m, more significant than our projection of near S$200m), whose performance was impacted by:
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- Temporarily reduced operating scale due to Air India’s voluntary safety pause to accommodate more pre-flight checks; the affected flights have been fully re-instated since 1 Oct 25;
- the continued closure of air space between India and Pakistan, which increases operating costs for Air India’s US and Europe routes; and
- the weakened India rupee against the US dollar (the rupee depreciated 3.6% against the US dollar during the quarter), which raised aircraft lease expenses (payment in US dollar terms).
Operating profit rose 22.4%, better than expected.
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- slightly better-than-expected cargo yields (down 3.3% y-o-y vs our projected 5.0% drop y-o-y).
- The positive impacts of these factors were amplified by SIA’s high operating leverage. Pax yield (- 3.0% y-o-y) and non-fuel per unit cost (+1.3% y-o-y) were broadly in line with our projections.
Interim dividend lowered to 8 cents for 1HFY26.
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