SINGAPORE Airlines 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 S$76 million ($58.79 million) for the three months ended June 30, compared with a profit of S$186 million a year ago. That compared to the LSEG estimate for a loss of S$4.3 million.
The last time SIA reported a quarterly loss was in the fourth quarter of FY2021/22, the quarter ended March 31, 2022, during the pandemic.
RECORD QUARTERLY REVENUE AS NUMBERS AND YIELDS RISE
The airline achieved a record quarterly revenue of S$5.71 billion, up 19.3% year-on-year, driven by strong passenger demand and a 12% increase in passenger yields.
SIA and budget unit Scoot carried a record 10.9 million passengers, up 6.3%, while cargo revenue jumped 33.5% to S$708 million on stronger yields and higher loads.
However, net fuel costs surged 78.5% to S$2.25 billion after jet fuel prices spiked following the outbreak of the Middle East conflict on February 28, causing fuel costs before hedging to more than double in the quarter.
Operating profit fell 73.8% to S$106 million.
The net loss was further deepened by a S$42 million drag from a higher share of losses from Air India, in which SIA holds a 25.1% stake.
Air India's majority owner Tata Sons said on Monday the carrier's turnaround could take up to a decade.
($1 = 1.2927 Singapore dollars) - Reuters
