By Sneha Kumar
(Reuters) -Singapore Airlines on Thursday reported a sharp fall in first-half profit, hit by losses at its Indian associate Air India, higher costs and intensifying competition.
The airline’s profit slid steeply in the second quarter to S$52 million ($40.18 million) from S$186 million in the first quarter, highlighting Air India’s drag on performance.
Singapore Airlines began accounting for Air India’s earnings in December 2024 after the integration of joint venture Vistara into Air India. The Singapore airline has a 25.1% stake in the Indian carrier.
Passenger demand remained strong and fuel costs fell, even as competition in key markets squeezed yields.
Singapore’s flag carrier sought to keep investors onside with a capital return plan and a confident outlook for travel demand heading into the year-end rush.
It unveiled a three-year special dividend plan totalling about S$900 million, paying 10 Singapore cents per share annually. It also announced an interim dividend of 5 Singapore cents a share.
Half-year net profit fell to S$239 million, down from S$742 million last year and missing the S$341.9 million consensus estimate from Visible Alpha.
The share of results from associated companies plunged S$417 million, largely because of Air India’s losses. Rising non-fuel expenses from inflation and network growth erased much of the benefit from cheaper jet fuel, keeping overall costs on an upward path.
The drop is not far off of our forecast decline of 74% for fiscal 2026, said Lorraine Tan, director at Morningstar. “Much of the decline is due to a normalisation of passenger yields post COVID.”
Revenues rose by 1.9% to a first-half record of S$9.68 billion.
In the first quarter, the company had flagged unpredictable demand for its cargo business due to tariffs.
The cargo business remains uncertain, with yields under pressure as airlines shift capacity away from the United States to other routes despite rising volumes, the airline said.
($1 = 1.2942 Singapore dollars)
(Reporting by Sneha Kumar and Adwitiya Srivastava in Bengaluru; Editing by Mrigank Dhaniwala and Jane Merriman)
