- SIA (SGX:C6L)’s 2QFY26 earnings slumped by 82% y-o-y to S$52m, taking 1H net profit to S$239m (~20%/23% of MIBG/consensus' full year forecasts), mainly dragged by share of losses from Air India and lower interest income.
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Pax yields decline has eased despite competition
- 1HFY26 revenue grew by 1.9% y-o-y to a record of S$9.7b as demand for air travel remained robust, with SIA and Scoot carrying 20.8m passengers (+8% y-o-y). Group passenger load factor (PLF) also improved by 1.3ppt to 87.7%, as traffic growth of 4.6% exceeded capacity expansion of 3.0%.
- While passenger yields fell by 2.9% to 9.9 cents per revenue passenger-km due to keen competition, the rate of decline has moderated and may be close to bottoming, we think.
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Cargo segment looks to remain challenging
- Cargo flown turnover slipped 2.8% to S$1.1b as yields continued to fall by 4.1%. Cargo load factor (CLF) fell 0.9ppt to 56.5%, as the 1.2% growth in cargo loads trailed capacity expansion of 2.8%. While cargo volumes are still growing on the back of the carrier’s diversified network and verticals, yields remain under pressure as airlines redeploy cargo capacity from the US to other lanes.
- Looking ahead, the air cargo segment should stay subdued amid shifting trade policies and geopolitical tensions, while front-loading demand has also eased quite significantly.
Proposes capital return plan but total dividend still lower
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