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SIA (SGX:C6L) reported a 5.0% increase in FY26 (financial year ended 31 Mar 2026) revenue to a record S$20.5b, in line with our expectations. This was led by passenger flown revenue, which grew 5.2% to S$16.7b.
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Robust travel demand.
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Passenger load factor (PLF) rose 1.1 percentage points (ppt) to 87.7%, as traffic growth of 4.7% outpaced capacity expansion of 3.4%, while passenger yields grew 1.0% to 10.4 Singapore cents per revenue passenger-kilometre (RPK). Management noted that the group benefitted from spillover traffic to Europe in March and the timing shift of the Easter holiday in 4QFY26.
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Cargo revenue, however, detracted, slipping 2.1% to S$2.2b. Cargo load factor (CLF) edged up 0.2ppt to 56.3%, but cargo yields remained under pressure, falling 3.6%.
Full impact of higher fuel prices to show up in FY27.
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The effect of higher fuel prices is only partially reflected in SIA’s March 2026 performance due to the lagged pricing of fuel bills, and management has guided for the full impact to filter through its financials in FY27. SIA has adjusted airfares upwards, and also has a hedging programme in place which, in our view, is more effective than most of its regional peers given that it is partially based on MOPS and not just Brent crude; however, these measures are unlikely to fully mitigate the jump in fuel prices.
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On fuel supply, management shared that the situation is stable at the airports it operates in for the near term, but there remains a lack of visibility over a longer timeframe.
Dividends likely supporting share price resilience.
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