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India.com
3 days ago
- Business
- India.com
Singapore Airlines Group's Profit Falls Nearly 59 Per Cent In Q1 Due To THIS Reason
Singapore: Singapore Airlines Group on Monday reported a steep fall of nearly 59 per cent in its net profit to 186 million Singapore dollars in the first quarter of the financial year 2025-26 (Q1 FY26), compared to the same period the previous year (Q1 FY25). The decline in profit was mainly due to losses from associated companies, especially Air India, and lower interest income. Singapore Airlines holds a 25.1 per cent stake in Air India, which has been facing financial and operational troubles. In a statement issued on Monday, Singapore Airlines said its total revenue for the quarter rose slightly by 1.5 per cent to SGD 4.79 billion. However, its net profit fell sharply by 58.8 per cent, mostly due to reduced operating profit and lower interest income. The airline said interest income dropped because of lower cash balances and falling interest rates. The group also pointed out that it recorded a share of losses from associated companies this time, unlike the same quarter last year when it saw profits. The losses from Air India were a major contributor. This is the first time Air India's financial performance has been reflected in Singapore Airlines Group's results, following the full merger of Vistara with Air India in December 2024. Despite the profit decline, Singapore Airlines said demand for air travel remained strong during the summer season in most regions. However, the airline also warned that the global aviation industry is still facing many challenges, including geopolitical tensions, economic instability, changing market trends, and supply chain issues. The airline added that it will remain flexible and responsive to changing demand. Air India has recently seen multiple setbacks. On June 12, an Air India Boeing 787-8 aircraft flying to London Gatwick crashed into a building shortly after taking off from Ahmedabad. The tragic accident killed 260 people, further adding to the airline's ongoing troubles.
Time of India
3 days ago
- Business
- Time of India
Singapore Airlines' June quarter profit plunges 59% on Air India's losses, other factors
Singapore Airlines Group's profit declined nearly 59 per cent to 186 million Singapore dollars in the June quarter as losses of Air India and other associated companies, along with lower interest income, trimmed its bottom line. Singapore Airlines, which holds a 25.1 per cent stake in loss-making Air India, saw its total revenue rise 1.5 per cent to SGD 4.79 billion, whereas net profit dropped 58.8 per cent to SGD 186 million in the June quarter compared to the year-ago period. Explore courses from Top Institutes in Please select course: Select a Course Category Data Analytics MCA Cybersecurity Degree Design Thinking CXO Finance Product Management Leadership Healthcare PGDM Project Management Management Data Science others Technology healthcare MBA Data Science Operations Management Digital Marketing Others Artificial Intelligence Public Policy Skills you'll gain: Data Analysis & Visualization Predictive Analytics & Machine Learning Business Intelligence & Data-Driven Decision Making Analytics Strategy & Implementation Duration: 12 Weeks Indian School of Business Applied Business Analytics Starts on Jun 13, 2024 Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Dubai villas | search ads Get Deals In addition to the lower operating profit, the reduction in net profit was largely attributable to a lower interest income on the back of lower cash balances and interest rate cuts, the airline said in a statement on Monday. The group also recorded "a share of losses of associated companies compared to a share of profits for the same quarter last year (-SGD 122 million), notably from Air India's financial results, which were not part of the Group's results for the same quarter last year", it said. Singapore Airlines Group started equity accounting for Air India's financial performance from December 2024, following the full integration of Vistara into Air India. Live Events According to the statement, the demand for air travel remains healthy in the second quarter of FY2025-26 across most route regions due to the traditional summer peak. "However, the global airline industry continues to face a volatile operating environment, with challenges ranging from geopolitical developments and macroeconomic fluctuations to changing market dynamics and supply chain constraints. The Group will be agile and proactive in responding to changes in demand patterns," the statement said. Air India has been facing various headwinds in recent times. On June 12, Air India's Boeing 787-8 plane enroute to London Gatwick crashed into a building soon after take off from Ahmedabad, killing 260 people.
Business Times
13-06-2025
- Business
- Business Times
Jetstar Asia's demise shows that Singapore could do more to attract and keep airlines at Changi
JETSTAR Asia's departure shows that Singapore cannot take its competitiveness as an air hub for granted – and suggests that it can do more to attract and retain airlines. On Wednesday (Jun 11), Jetstar Group announced that its Singapore-based low cost carrier (LCC) Jetstar Asia (JSA) will cease operations this Jul 31. Changi's high airport fees were one reason cited, along with increased supplier costs and regional competition. With the loss of JSA, the only remaining Singapore-based carriers are those of the Singapore Airlines Group: Singapore Airlines, Scoot and Singapore Airlines Cargo. As at the first week of June, JSA operates around 180 weekly services at Changi. This is about 5 per cent of total weekly passenger services, and forms about 3 per cent of passenger traffic, said the Civil Aviation Authority of Singapore (CAAS). While Singapore Airlines Group is ramping up flights to cover JSA's exit, Changi may also need to reassess its strategy. JSA's withdrawal brings the spotlight back to the fact that while Singapore is a leading regional air hub, it is also expensive compared to its rivals. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Star struck Started in 2004, JSA is owned by Singapore-based holding company Westbrook Investment (51 per cent) and Australia's Qantas group (49 per cent). Temasek previously held as much as 33.5 per cent, but divested in 2009. JSA is expected to post a loss of S$35 million in underlying earnings before interest and taxes in the financial year ending Jun 30. Jetstar did not specify how airport fees affected its bottom line, but aviation industry observers told The Business Times that these were likely an important reason for the closure. To use airports, airlines pay passenger fees – added to ticket prices – as well as landing, parking and aerobridge (LPA) charges. Such fees go towards the operation, maintenance and expansion of airport infrastructure. Singapore's airport passenger fees are higher than many of its regional rivals, and set to keep rising. CAAS and airport operator Changi Airport Group (CAG) announced fee hikes for both passengers and airlines over the next five years. Currently, a passenger departing Changi pays S$65.20. This will rise to S$79.20 in 2030. This is several times what a passenger pays in nearby rivals: 700 baht (S$27.64) in Bangkok, 25,000 won (S$23.58) in Seoul, and up to 70 ringgit (S$22) in Kuala Lumpur. Regionally, Hong Kong's fees are closest to Singapore's, at HK$355 (S$57.98). Last year, JSA chief executive officer John Simeone told the media that Singapore was becoming a 'very expensive' location to operate from, whether in terms of airport, operating or ground service charges. In response to media queries, CAG said that airport fees are applied equally to all carriers and constitute a small component of airlines' total operating cost. But industry observers noted that higher passenger fees hit LCCs harder than full-service or legacy carriers. As LCCs have lower ticket prices, airport fees represent a large share of the total. LCCs may also incur higher fees due to their point-to-point service model of flying directly between destinations. This means passengers pay airport departure fees rather than the transit fees of S$12 in Changi. Passengers on legacy carriers may pay the lower transit fee, due to these airlines' hub-and-spoke approach of flying into a major hub and having passengers take onward connecting flights. Higher supplier costs may also contribute to making Changi pricier than its rivals. Qantas group CEO Vanessa Hudson said that JSA has seen some 'supplier costs increase by up to 200 per cent'. These include suppliers that provide supporting services to aircraft, such catering and baggage handling. In Singapore, these suppliers face rising wage pressures, compliance cost and renewed investment in facilities and sustainability infrastructure, said Awad Khireldin, assistant professor of the aviation management degree programme at the Singapore Institute of Technology. To cope with their own costs, suppliers have been charging airlines more. Generating lift CAG said it has been working with airlines, including JSA, to enhance productivity and cost-efficiency. But wider efforts to draw airlines here may be needed. Singapore has ambitious plans to scale Changi's operations further, with Terminal 5 in the mid-2030s. Changi's passenger air traffic reached an all-time high of 68.4 million for the year ended March 2025, with its maximum capacity being around 90 million now. T5 will expand capacity to around 140 million. Yet, growth may be difficult if LCCs avoid the Republic because of high costs. While Apac is predicted to lead global aviation's growth in the coming years, airlines have thin margins. The International Air Transport Association projects that Asia-Pacific airlines' net profit margin per passenger will be just 1.9 per cent, or US$2.60, in 2025. Airlines may not choose Singapore if the cost base is not controlled, and instead head to where they can preserve profits. Granted, CAAS is taking steps to ease the fee hike, such as a 50 per cent LPA fee rebate to airlines from April to September. But perhaps it could go beyond short-term relief, and instead give long-term incentives to airlines that base themselves or increase the scale of their operations in Singapore. Asked if airlines receive benefits to base themselves here, CAAS director for air transport Sidney Koh replied only that Singapore-based airlines enjoy air traffic rights in Singapore's Air Services Agreements with other countries, which can be used to operate flights to those countries. Here, the aviation sector could apply lessons from the maritime industry. Under existing schemes, maritime and shipping companies receive tax breaks and harbour fee rebates, among other things, if they establish operations and register ships here. Changi could explore similar measures and scale them by the size of airline operations. After all, while passenger fees are needed to fund infrastructure improvements, it is counterproductive if they themselves limit passenger numbers. To be fair, fees were only one factor in JSA's descent. Other crucial factors were a lack of scale and the inability or unwillingness to quickly expand due to aircraft shortages. But as competition grows, airlines will be eager for any edge they can get – such as receiving benefits to operate in one of the most strategic, well-run air hubs in the region.
