SINGAPORE Airlines (SIA) on Tuesday reported a first-quarter net loss, its first since 2022, weighed down by losses from its associate Air India and higher jet fuel costs from the Middle East conflict despite record revenue.
SIA’s results reflect a broader squeeze hitting the global airline industry, where carriers from the United States to Asia have reported that rising passenger yields and record travel demand are failing to keep pace with fuel bills inflated by the Middle East conflict.Singapore Airlines said demand for air travel and cargo remains robust, but warned that a prolonged Middle East conflict could affect supply chains, global trade and macroeconomic conditions.The city-state’s flag carrier posted a net loss of SG$76 million ($58.79 million) for the three months ended June 30, compared with a profit of SG$186 million a year ago. That compared to the LSEG estimate for a loss of SG$4.3 million.The last time SIA reported a quarterly loss was in the fourth quarter of FY 2021/2022, the quarter ended March 31, 2022, during the pandemic.Record quarterly revenueThe airline achieved a record quarterly revenue of SG$5.71 billion, up 19.3 percent year on year, driven by strong passenger demand and a 12-percent increase in passenger yields.SIA and budget unit Scoot carried a record 10.9 million passengers, up 6.3 percent, while cargo revenue jumped 33.5 percent to SG$708 million on stronger yields and higher loads.However, net fuel costs surged 78.5 percent to SG$2.25 billion after jet fuel prices spiked following the outbreak of the Middle East conflict on Feb. 28, causing fuel costs before hedging to more than double in the quarter.Operating profit fell 73.8 percent to SG$106 million.The net loss was further deepened by a SG$42 million drag from a higher share of losses from Air India, in which SIA holds a 25.1-percent stake.
