SIA (SGX:C6L)’s 3QFY26 reported net profit of S$505m, representing a significant q-o-q rebound from 2QFY26’s low of S$52m, was within our guided range of S$450m-530m, but is deemed a beat to consensus estimates.
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2.8% y-o-y growth in pax yields a positive surprise.
The stronger-than-expected operating profit was driven by higher-than-expected pax yield, which rose 2.8% y-o-y (we were projecting it to be y-o-y flattish), but was partly offset by lower-than-expected cargo yield, which dropped 6.2% y-o-y (vs our projected 4.0% y-o-y drop).
Fuel cost/ATK (+1.4% y-o-y) and non-fuel opex/ATK (+0.1% y-o-y) were in line with our expectations.
Heavier-than-expected Air India drag.
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weakened INR against US$ during the quarter.
We note that these two factors have extended into 4QFY26. In addition, in 3QFY26, Air India also incurred a one-time charge due to the implementation of India’s new labour code (making provisions for higher employee social welfare); this one-time charge might have led to an additional S$15m-25m loss contribution from Air India to SIA, by our guesstimate.
Strong balance sheet.
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
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