Singapore Airlines Profit Drops, Faces Fuel-Cost Headwinds From Mideast Conflict — Update

By Kimberley Kao

Singapore Airlines' annual revenue climbed to a new high, but profit fell after three straight years of record earnings, adding uncertainty to an outlook already clouded by the Middle East conflict.

Across the world airlines have been grappling with rising fuel costs that are threatening to add billions of dollars in unexpected expenses this year, and forcing carriers to increase fares and trim routes to stem mounting costs.

Shares in Singapore Airlines have lost more than 12% since war broke out in the Middle East in late February, trailing the city-state's benchmark stock index, which has recouped losses, as uncertainty lingers for the aviation industry. Fuel prices remain high, while airspace in the region continues to be disrupted.

The most immediate impact of the war has been on jet-fuel prices, which have more than doubled since the conflict began, the Singapore flag carrier said Thursday. It expects to feel the full weight of that in the new fiscal year.

Singapore Airlines, which also operates budget carrier Scoot, has responded by raising air fares across its network. But pricier tickets aren't enough to offset higher prices of jet fuel, the group's single-largest expenditure item, it said.

SIA's net profit dropped 57% to 1.18 billion Singapore dollars, equivalent to US$927.5 billion, for the 12 months ended March. That exceeded analysts' expectation of S$1.075 billion, according to a Visible Alpha poll.

The airline attributed the decline in profit to an absence of the S$1.10 billion noncash accounting gain recognized in November 2024 after the Air India-Vistara merger. It also flagged a swing to a S$846 million loss from associate companies, dragged by losses from its 25% stake in Air India.

Revenue rose 5.0% to a record S$20.52 billion. Healthy demand for air travel, stronger yields and lower net fuel cost for the year drove operating profit 39% higher to S$2.375 billion.

Net fuel costs fell on lower average fuel prices and higher fuel hedging gains during the period, while cargo flown revenue declined 2.1%.

Analysts sounded a note of optimism ahead of the results, saying that SIA's passenger traffic could be supported by the shifts in travel patterns from Middle Eastern airlines toward other regions, including Asia.

Singapore Changi Airport recorded an 8.5% increase in passenger traffic in March from a year ago. That compared with the 1.8% rise in February, and a 3.0% decline in January. Passenger traffic for the first three months of the year was driven by strong demand to and from North Asia and Europe, the airport said.

"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," SIA said.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

May 14, 2026 08:21 ET (12:21 GMT)