Tourexpi
Singapore Airlines reported a sharp 82.1% year-on-year
decline in net profit for the second quarter of its financial year, citing
reduced interest revenue and a substantial loss related to its stake in Air
India.
Net profit fell to 52 million Singapore dollars ($40
million) for the July–September period, down from $223 million in the same
quarter last year, according to financial results released on Thursday. For the
first half of the fiscal year, net profit also contracted significantly,
sliding 67.8% to $183.8 million.
Mixed performance: Revenue up, profits down
Despite the drop in profits, revenue increased 2.2%
year-on-year in the July–September period, reaching $3.76 billion.
Interest income decreased by $32.3 million, driven by
lower cash balances and falling interest rates. Meanwhile, contributions from
associated companies — including Air India — resulted in a $226.8 million loss.
Air India weighs heavily on results
Singapore Airlines (SIA) holds a 25.1% stake in Air
India following the airline’s merger with Vistara in November 2024, a joint
venture with India’s Tata Sons. SIA began equity accounting for Air India in
December 2024.
According to Bloomberg, Air India has reportedly
sought at least 100 billion rupees ($1.1 billion) in financial assistance from
SIA and Tata Sons after a June accident that claimed the lives of more than 240
passengers. Air India had already dampened SIA’s results in the previous
quarter.
“Despite the ongoing challenges, the SIA Group remains
committed to working with its partner Tata Sons to support Air India’s
comprehensive multi-year transformation programme,” SIA said in a statement.
Demand remains strong, outlook uncertain
SIA noted that demand for air travel remains strong
heading into the third-quarter peak season. However, the airline warned that
the outlook for air cargo remains uncertain amid market volatility and shifting
trade regulations.
“The airline industry continues to face challenges
from geopolitical tensions, macroeconomic headwinds, inflationary cost
pressures, and supply chain constraints,” the company added.
Image
Credit: © AA
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