Singapore Airlines Cautious About Fuel Impact

It’s still too early for Singapore Airlines to make predictions for the financial year 2026/2027. The effects from higher fuel costs could be offset by “opportunities” from adjusting the network and deploying capacity on the most profitable routes. If the crisis in the Middle East takes longer to solve, “there could be broader implications for supply chains and macroeconomic conditions affecting demand patterns.” Singapore Airlines Group reported its FY25/26 results today. Consolidated revenues for Singapore Airlines and Scoot grew by five percent to $20.5 billion year-over-year. The two airlines carried 7.7 percent more passengers, or 42.4 million in total. Capacity grew by 3.4 percent, the load factor by 1.1 percentage points to 87.7 percent. Cargo revenues were down by 2.1 percent to $2.2 billion as yields were lower. Expenses were up by 1.8 percent to $18.1 billion, with the increase in non-fuel costs mainly caused by the capacity expansion and inflation. The operating profit was up by 39 percent to $2.4 billion. The net profit was down by 57.4 percent to $1.2 billion, but last year’s included a one-off accounting gain from the merger of Air India and Singapore’s subsidiary Vistara, offset by the loss of Air India. In the second half of the year (September 2025-March 2026), consolidated revenues were up eight percent to $10.8 billion. Passenger revenues increased thanks to higher volumes and yields. The load factor reached 87.6 percent, up 0.8 points and the highest ever for a HY2. Cargo yields were weaker and contributed to 1.3 percent lower revenues. HY2 expenses grew 1.6 percent to $9.3 billion, and the operating profit by 72 percent to $1.6 billion. The net profit was down by 53.6 percent to $945 million, reflecting the absence of the gain from selling Vistara a year earlier. Fuel costs Fuel costs were working out well for SIA Group. For the full year, they were down to $5.0 billion, thanks to a $143 million benefit on hedging. Fuel hedging contributed with even $218 million in HY2 to lower the bill, which ended at $2.5 billion. But as fuel costs are lagging behind, the effect from the sharp increase of kerosene in March will only become evident in the April results, which is Q1 for the new financial year 2026/2027. In the financial statements, SIA Group says: “As at 31 March 2026, the Group had entered into Brent and MOPS hedges with maturities extending up to the fourth quarter of FY2030/31 that cover up to approximately 14.5 percent of the Group’s projected annual fuel consumption, at an average price ranging from $65 to $93 per barrel.” “The full impact is expected to feed through in FY2026/27. While SIA and Scoot have raised air fares across their network, the adjustments do not fully offset the rise in the price of jet fuel, which is the Group’s single-largest expenditure item. Depending on the duration and how the situation in the Middle East develops, there could be broader implications for supply chains and macroeconomic conditions affecting demand patterns”, the airline says in the earnings release. SIA Group ended the year with $7.9 billion in liquidity and has access to $3.3 billion in credit lines. Total debt stood at $10.6 billion. It will pay 10 cents per share in dividends to shareholders as part of a buyback program, of which a first tranche of 3 cents was paid in December and a second of 7 cents will be paid in August. More capacity This summer season, Singapore Airlines is adding more capacity to London. Gatwick sees ten flights a week, up from the previous seven a week, until the end of October. Gatwick sees twice-daily services in July and August, which brings daily flights to six when Heathrow is included. From mid-July, Manchester is going to a daily service as well. In China, Hangzhou will become the airline’s ninth destination from June. SIA already announced increased frequencies for the upcoming winter season to Milan, Munich, and London Gatwick, while also connecting to Madrid via Barcelona. Scoot, which announced an order for 11 Airbus A320neo aircraft last week, also expanded the network this summer season with new destinations in Thailand, Indonesia, and Japan. Frequencies have been increased to numerous destinations in Asia from April to June, with Vienna the only one in Europe to see more services. Both Singapore Airlines and Scoot continue to suspend services to Dubai and Jeddah, while Riyadh will only commence in September. Looking ahead, Singapore Airlines will reveal its new long-haul cabin products at the end of the year. This includes a refreshed in-flight entertainment system and amendments to its food and beverage products and amenity kits. SIA will progressively roll out StarLink across its fleet next year. Despite its share of $256.9 million in the loss of Air India, Singapore says it “is committed to its 25.1 percent investment in the Air India Group, which is a core component of its long-term multi-hub strategy. This strategic investment provides the Group with a direct stake in one of the world’s largest and fastest-growing aviation markets, complementing its Singapore hub and strengthening its long-term growth. SIA is working closely with its partner Tata Sons to support Air India’s multi-year transformation program.”

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