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SIA (SGX:C6L)'s 2H26/FY26 PATMI declined 53.6%/57.4% y-o-y to S$945mil/S$1,184mil, forming 97%/78% of our FY26e estimates. Associate losses weighed on earnings, with full-year Air India losses at S$828.5mil.
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a S$178mil y-o-y decline in net fuel cost, as fuel hedging led to a S$218mil hedging gain in 2H26.
The Positives
(+) Strong operational performance.
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Operating profit surged 39% y-o-y to S$2,375mil (11.6% operating margin). Passenger load factor reached 87.7% as traffic growth of 4.7% outpaced capacity expansion of 3.4%. Passenger yield rose 1.0% y-o-y to 10.4 cents/RPK.
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Net fuel costs fell S$361mil (6.7% drop y-o-y), driven by S$143mil in hedging gains and fuel bills largely locked in at pre-conflict prices.
The Negative
(-) Associate losses drag.
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the US-Iran conflict in Feb26, which has largely impacted Air India given the Middle East’s transit hub importance for Indian aviation.
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Air India also operates without a fuel hedging programme, leaving it fully exposed to changes in jet fuel prices. Management has guided losses to remain elevated near term.
Outlook
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