SIA (SGX:C6L) reported 3QFY26 operating profit of S$ 792mil (+25.9% y-o-y), bringing 9MFY26 operating profit to S$ 1,595mil (+11.9% y-o-y), above DBS and consensus forecasts, at 91%/95% of full-year estimates respectively.
3QFY26 results outperformed expectations.
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Total expenditure rose 2.7%, broadly tracking capacity growth, while higher fuel prices and uplift volumes pushed net fuel costs modestly higher (+3.7% y-o-y). As a result, operating margin expanded 2.3ppt y-o-y to 14.4%.
Share of losses from associated companies increased by S$ 163mil to S$ 178mil, as a full quarter of Air India losses was recognised this year compared with only one month in the prior year.
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A more constructive pricing backdrop may be emerging.
Passenger yields surprised to the upside, turning positive y-o-y and the improvement was broad-based across all regions. This turnaround is notable given persistent pricing pressure across the APAC region amid intensifying competition, though we note that 3Q is typically the strongest seasonal quarter.
Passenger yields appear to have stabilised at a new equilibrium level after normalising from post-pandemic highs, with management for the first time guiding for stable yields going forward rather than gradual moderation, which will support upwards revisions to FY26/27F operating profit estimates.
Scoot delivered a particularly strong performance.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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