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Shares of Singapore Airlines (SIA) took a sharp tumble in early trading on July 29, plunging as much as 8.6 percent following the announcement of a steep 59 percent decline in the group’s first-quarter net profit for the financial year 2025/26. The stock closed down 7.4 percent at $7.04, marking the largest intra-day drop since August 2024, with heavy trading volume of 38.5 million shares.
SIA reported net profit of S$186 million for the three months ended June 30, down from S$452 million a year earlier. This sharp fall was driven primarily by lower interest income and significant losses shared from associates, chiefly Air India, in which SIA owns a 25.1 percent stake. Air India’s financial results were newly included from December 2024 after the full integration of Vistara into Air India, whereas they were absent from the prior year’s first quarter results, explaining part of the steep decline.
Despite the profit setback, the group recorded strong operational performance: total revenue rose 1.5 percent to S$4.79 billion, supported by record passenger numbers. SIA and its subsidiary Scoot carried a combined 10.3 million passengers in the quarter, a 6.9 percent increase year-on-year, with passenger load factor improving slightly to 87.6 percent as growth in traffic outpaced capacity expansion.
However, passenger yields fell 2.9 percent due to intensified competition amid capacity increases by other airlines. Cargo revenue also declined amid falling yields and wider capacity over cargo demand.
Analysts pointed to the drag on SIA’s bottom line from Air India’s continued losses and the lingering impact from the Air India Flight 171 crash in June, which led to flight cuts and a reported 20 percent drop in bookings on domestic and international routes. Market reactions included downgrades by several analysts, with target prices lowered and warnings of potential further losses from Air India.
Nonetheless, some experts remain cautiously optimistic about SIA’s outlook, noting stabilizing passenger yields and ongoing strengths in brand, service, and innovation that should help the airline to navigate current market challenges and transition towards renewed growth.
In summary, Singapore Airlines faces near-term headwinds from associate losses and competitive pressure on yields despite solid travel demand and record passenger traffic, reflecting a mixed outlook amid volatile global and regional aviation market conditions.