Despite record passenger numbers, Singapore Airlines faces a profit squeeze from lower interest income and Air India losses.
Singapore Airlines (SIA) posted a sharp 59% year-on-year drop in net profit for the first quarter of FY2025/26, as lower interest income and losses from associated companies offset gains in passenger traffic.
Profit Declines Despite Higher Revenue
SIA reported a net profit of $186 million for the quarter ended June 30, 2025, down from $452 million a year earlier. Operating profit fell 13.8% to $405 million, while group revenue inched up 1.5% to $4.79 billion. The airline attributed the profit decline to lower interest income—about $61 million less—and losses from Air India, whose results were included following Vistara’s integration in December 2024. <
Record Passenger Traffic, Lower Yields
SIA and its low-cost arm Scoot carried a record 10.3 million passengers, a 6.9% increase from the previous year. However, passenger yields dropped 2.9% to 10 cents per revenue passenger-kilometre as competition intensified with more airlines adding capacity. The cargo segment also saw revenue fall 1.9%, with yields slipping 4.4% and load factors weakening.
Costs and Fleet Developments
Group expenditure rose 3.2% to $4.39 billion, driven by higher non-fuel costs and inflation. The airline maintained a strong operating fleet of 204 aircraft, with Scoot adding new Airbus, Boeing, and Embraer planes. Total debt declined to $11.5 billion, reducing the debt-to-equity ratio to 0.73, while cash reserves fell to $7.8 billion after loan repayments and capital spending.
Air India’s Impact on Results
SIA’s share of losses from Air India weighed on earnings, contrasting with profits in the same period last year. The equity accounting follows SIA’s 25.1% stake in the merged Air India-Vistara entity, giving it exposure to India’s fast-growing aviation market but also to the airline’s financial challenges.
Network Expansion and Market Adjustments
Looking ahead, SIA plans to ramp up capacity to Malaysia, the Philippines, Sri Lanka, and Thailand, while Scoot will begin operations to Labuan Bajo and Medan in Indonesia, and Okinawa in Japan, pending approvals. The airline is also absorbing affected passengers and offering jobs to staff impacted by Jetstar Asia’s closure on July 31.
Outlook: Volatility Ahead
Despite healthy travel demand, SIA warned of a volatile operating environment, citing geopolitical tensions, macroeconomic fluctuations, and supply chain disruptions. Ongoing U.S. tariffs on cargo add to the uncertainty. The group stressed its agility in adjusting capacity and its focus on identifying growth opportunities while leveraging a strong balance sheet and digital capabilities.
SIA’s Q1 results highlight the airline’s resilience amid rising costs and industry headwinds. While record passenger numbers and a robust network provide a foundation, challenges from global volatility and associated losses underscore the need for strategic agility in the months ahead.
Sources: The Straits Times (2025) , The Edge Singapore (2025)
Keywords: Singapore Airlines Profit, SIA Q1 Earnings, Air India Losses, Aviation Outlook, Passenger Traffic
