Air India Losses Drag Singapore Airlines Profit Down 82% in Q2

Singapore Airlines (SIA) reported a sharp decline in September-quarter earnings as deepening losses at Air India, in which it holds a 25.1% stake, significantly eroded the group’s profitability. The financial setback comes despite steady passenger demand and record travel volumes across SIA’s network.

Profit Hit by Air India’s Weak Financials

SIA’s net income for the quarter fell 82% year-on-year to S$52 million. The decline stems largely from the full impact of Air India’s widening losses, which are now reflected in SIA’s books following the start of equity accounting in December 2024—after Vistara’s integration into Air India was completed.

In the first half of the year, SIA’s share of results from associated companies dropped by S$417 million, almost entirely due to Air India’s financial performance. The Indian carrier has been battling rising costs, capacity pressures, and a challenging recovery curve.

According to Tata Sons, Air India’s consolidated losses surged 48% in FY25 to ₹10,859 crore, marking the highest loss among all Tata Group entities. The financial strain has intensified even as India’s aviation market continues to expand.

Deadly Air Crash Adds to Air India’s Challenges

Air India is also dealing with the aftermath of a tragic June crash that claimed 260 lives—one of the deadliest aviation incidents in recent years. The accident has added operational and financial pressure on the airline, prompting it to seek more than ₹10,000 crore in support from Tata Sons and Singapore Airlines.

During FY25 alone, both partners injected ₹9,558 crore into Air India for capital expenditure and restructuring needs, with SIA contributing a significant portion.

Investment Still Central to SIA’s Long-Term Vision

Despite the losses, SIA reiterated its commitment to Air India, describing the investment as a pivotal part of its multi-hub strategy. Access to India’s fast-growing aviation market remains a long-term priority for the group.

Air India has embarked on a five-year transformation programme aimed at fleet renewal, operational integration, and service improvements. SIA indicated it will continue supporting these efforts as the airline navigates its turnaround plan.

SIA Shows Core Strength Despite Setbacks

Excluding the Air India drag, SIA’s performance remained resilient. The group recorded a 2.2% rise in quarterly revenue to S$4.9 billion, driven by sustained air-travel demand.

The airline carried a record 10.5 million passengers during the quarter. Both SIA and its low-cost arm Scoot operated fuller flights, with Scoot maintaining load factors above 90% for six consecutive months—benefiting from Jetstar Asia’s shutdown in July.

Operating profit jumped nearly 23% to S$398 million, supported by easing fuel prices and stable operating costs. However, passenger yields dipped 3% to 9.8 Singapore cents per kilometre.

Outlook: Demand Strong but Risks Persist

SIA expects firm travel demand heading into the third quarter, though the continued financial strain from Air India remains a key risk to group earnings. The success of Air India’s transformation will be crucial in determining future profit stability for SIA.