- Singapore’s aviation sector held up well in 2025, with global passenger traffic (+5.2% y-o-y) and air cargo volumes (+3.1% y-o-y) expanding despite softer consumer sentiment, geopolitical tensions and trade uncertainty. However, APAC airlines, including SIA, underperformed due to sharper passenger yield compression amid intense regional competition.
Sector fundamentals remain favourable in 2026.
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- Supply constraints remain a key feature, with aircraft delivery delays keeping the global fleet older and more heavily utilised, supporting MRO demand, while new-generation engine durability issues and spare-parts shortages further lift maintenance intensity.
- Passenger yield pressure in the region is expected to persist into 2026, though at a more gradual pace than in 2025. Air cargo demand is expected to significantly outstrip global trade volumes at +2.6% y-o-y in 2026, supported by adaptive trade flows and robust demand for higher-value shipments such as AI-related hardware and e-commerce.
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Upstream aviation and defence are still the clearer winners at this stage of the cycle.
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