Singapore Airlines’ latest results tell a more complicated story than the headline profit decline suggests.
The Singapore Airlines Group reported a 57.4% fall in net profit for FY2025/26, with profit attributable to shareholders dropping to S$1.18 billion from S$2.78 billion a year earlier. On the surface, that looks like a sharp deterioration. Beneath the headline, however, Singapore Airlines’ core airline business performed strongly, with record revenue, higher passenger traffic, stronger yields and a 39% increase in operating profit.
The real drag came from below the operating line: the absence of last year’s S$1.098 billion non-cash gain from the Air India-Vistara merger, combined with Singapore Airlines now accounting for a full year of Air India’s losses through its 25.1% stake in the enlarged Indian carrier.
That makes the latest results a direct follow-up to the warning signs visible six months ago. In November, The Aviation Brief reported that Air India’s losses had started to weigh on Singapore Airlines’ half-year profit, while rising costs pointed to a deeper pressure story. The full-year results now show that the Air India drag has become much larger, even as SIA’s own operating performance has improved.
A Strong Airline Business Behind a Weak Profit Headline
Singapore Airlines and Scoot carried a record 42.4 million passengers in FY2025/26, up 7.7% year-on-year. Group passenger load factor rose to 87.7%, while passenger yields increased 1.0% to 10.4 Singapore cents per revenue passenger-kilometre. Revenue reached a record S$20.52 billion, up 5.0%.
That growth translated into a much stronger operating result. SIA’s operating profit rose 39.0% to S$2.38 billion, while second-half operating profit jumped 72.0% to S$1.57 billion, a record for the period.
This is the key distinction: SIA’s airline operations improved. The sharp fall in net profit was driven mainly by accounting and associate-company effects, especially Air India.
From Merger Gain to Air India Drag
Last year, Singapore Airlines’ profit was boosted by a S$1.098 billion non-cash accounting gain linked to the completion of the Air India-Vistara merger. That gain did not repeat this year.
At the same time, Air India moved from being a partial-year exposure to a full-year drag. SIA said the swing from a share of profits of associated companies last year to a loss this year was due to accounting for its share of Air India’s full-year losses, compared with only four months in the previous year.
The scale is significant. SIA’s annual report shows Air India recorded revenue of S$10.53 billion in FY2025/26, but a loss after tax of S$3.77 billion and total comprehensive loss of S$3.56 billion. Its liabilities exceeded assets by S$1.02 billion as of 31 March 2026.
For SIA, this translated into a major associate-company drag. The group reported a S$828.5 million share of losses from associated companies, compared with a S$17.1 million profit from associates a year earlier.
The same transaction that inflated SIA’s profit last year is now exposing it to the full financial cost of Air India’s turnaround.
The Cost Story Has Changed, Not Disappeared
The cost picture is more nuanced than in the earlier half-year story.
For FY2025/26, SIA’s total expenditure rose only 1.8% to S$18.15 billion. Net fuel cost actually fell 6.7% to S$5.03 billion, helped by lower full-year average fuel prices and higher hedging gains.
But that does not mean SIA no longer has a cost problem. Non-fuel expenditure rose 5.4%, mainly because of capacity expansion and inflationary pressures. Staff costs, depreciation, aircraft maintenance, handling charges, landing and overflying charges, and inflight meals all increased year-on-year.
The more important warning is forward-looking. In the second half, SIA said fuel prices rose 1.9%, but the full impact was only partially reflected because jet fuel is typically priced on a lagged basis. The airline said the higher jet fuel price environment arising from the Middle East conflict is expected to feed through more fully in FY2026/27.
So the story is no longer simply “rising costs hit SIA.” A more accurate framing is: SIA’s FY2025/26 results still benefited from lower full-year fuel costs, but non-fuel inflation remains present and a delayed fuel-cost shock is building into the next financial year.
Why Air India Is Now Central to the SIA Story
Singapore Airlines’ investment in India has changed character.
Before the merger, SIA’s exposure was primarily through Vistara, a premium Indian carrier in which it had a strategic joint venture with Tata Sons. After the merger, SIA owns 25.1% of the enlarged Air India group, giving it access to one of the world’s fastest-growing aviation markets but also exposing it to one of the most complex airline turnarounds globally.
Singapore Airlines acknowledges its investment in the Air India Group as a core component of its long-term multi-hub strategy, complementing its Singapore hub and strengthening its long-term growth.
Air India’s transformation involves fleet renewal, cabin retrofits, network restructuring, integration costs, operational reliability challenges, and the consolidation of multiple airline businesses under the Tata Group. The FY2025/26 numbers suggest that this remains an expensive and loss-making process.
Strategic Logic, Financial Pain
SIA is unlikely to judge Air India only on short-term earnings. India remains a structurally attractive aviation market, and Air India gives Singapore Airlines strategic exposure to long-haul growth, premium traffic, and one of Asia’s largest passenger markets.
But the latest results show that this exposure is now large enough to materially reshape SIA’s reported profit.
For now, Singapore Airlines is flying strongly in its own business. The problem is that its headline earnings are being pulled in two directions: operational strength at home, and heavy losses from its most important strategic investment abroad.
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