Singapore Airlines (SIA) reported a 58.8% drop in net profit for the first quarter of FY2026, falling to S$186 million from S$452 million a year earlier. The decline was attributed to reduced interest income and losses from associated companies, the carrier disclosed in a stock exchange filing on July 28.
Despite the drop in profit, revenue for the quarter rose 1.5% year-on-year to S$4.8 billion, supported by robust passenger demand. SIA and its budget arm, Scoot, carried a record 10.3 million passengers—a 6.9% increase.
Passenger traffic grew 4.1%, outpacing the 3.3% increase in capacity, which lifted the group’s passenger load factor by 0.7 percentage points to 87.6%. However, passenger yields declined 2.9% to S$0.10 per revenue passenger-kilometre amid rising industry competition and capacity expansion by rivals.
SIA’s cargo segment saw revenue dip by 1.9% (S$10 million), driven by a 4.4% drop in yields. Although cargo volumes rose 2.8%, they lagged behind the 4.2% increase in capacity, causing the cargo load factor to fall 0.8 percentage points to 56.9%.
Operating expenses climbed 3.2% to S$4.4 billion, with non-fuel costs rising 8.5% to S$3.1 billion, mainly due to inflation and increased operational capacity. Net fuel costs decreased by 7.9% to S$1.3 billion, helped by lower fuel prices. However, this benefit was partially offset by increased fuel consumption (S$70 million) and a fuel hedging loss of S$109 million, compared to a gain in the prior year.
Consequently, SIA’s operating profit for the quarter declined 13.8% to S$405 million, down from S$470 million in Q1 FY2025.
Future Outlook
The airline plans to increase capacity to destinations in Malaysia, the Philippines, Sri Lanka, and Thailand following the closure of Jetstar Asia. While air travel demand remains strong heading into the summer peak of Q2 FY2026, SIA acknowledged ongoing challenges, including global geopolitical tensions, economic volatility, and competitive pressures.
Tariffs continue to weigh on the airline’s cargo operations, although SIA noted its diverse network and business model help mitigate risks linked to specific regions.
“The group will remain agile in navigating this evolving environment and focus on unlocking new growth opportunities,” the company stated.
SIA shares rose 0.4% on Monday, closing at S$7.60.
