Fuel costs, Air India losses push SIA to first loss since pandemic

Dhaka: Singapore Airlines Group reported a first-quarter net loss on July 28, its first since 2022, as losses from associate carrier Air India and elevated jet fuel costs stemming from the Middle East conflict offset record revenue.

The Singapore-based carrier posted a net loss of SGD 76 million (USD 58.79 million) for the three months ended June 30, reversing a profit of SGD 186 million recorded during the same period a year earlier.

The airline's previous quarterly loss came in the fourth quarter of FY2021/22, the three-month period ended March 31, 2022, during the pandemic downturn.

Despite the loss, Singapore Airlines achieved record quarterly revenue of SGD 5.71 billion, up 19.3% year-on-year, supported by robust passenger demand and a 12% rise in passenger yields.

The airline and its budget subsidiary Scoot together carried a record 10.9 million passengers during the quarter, an increase of 6.3%, while cargo revenue climbed 33.5% to SGD 708 million on stronger yields and higher cargo loads.

However, net fuel costs jumped 78.5% to SGD 2.25 billion after jet fuel prices spiked following the outbreak of the Middle East conflict on February 28, more than doubling pre-hedging fuel costs for the quarter.

As a result, operating profit fell 73.8% to SGD 106 million, a sharp decline from the prior year.

The net loss was deepened further by a SGD 42 million drag stemming from a higher share of losses at Air India, in which Singapore Airlines holds a 25.1% stake.

The airline said passenger and cargo demand remains strong overall but cautioned that a prolonged Middle East conflict could disrupt global supply chains, trade flows, and broader macroeconomic conditions going forward.

The results mirror wider pressure across the global aviation sector, where carriers in the United States and Asia have reported that rising yields and strong travel demand are struggling to keep pace with fuel bills inflated by the ongoing regional conflict.