Third-quarter net profit slumps 69%
Airline posts record quarterly revenue of S$5.51 bln
Operating profit up 26% to S$792 mln
Expenditure in the quarter rises to S$4.71 billion
Recasts the story with additional figures and context throughout
By Kumar Tanishk, Nikita Maria Jino and Julie Zhu
Feb 24 (Reuters) - Singapore Airlines' SIAL.SI third quarter profit fell 69%, it said on Tuesday, distorted by a one-off gain a year earlier and due to losses at associate Air India, although strong passenger demand boosted operating revenue.
Singapore Airlines has a 25.1% stake in Air India and began accounting for the Indian airline's earnings in December 2024 after the integration of Singapore Airlines' joint venture Vistara into Air India.
Singapore's flag carrier reported a net profit of S$505 million ($398.6 million) for the October-December period, down from S$1.63 billion a year earlier - when it had been bolstered by a S$1.1 billion gain from the Air India-Vistara merger.
The decline in profit masked a robust operational performance, with the carrier posting record quarterly revenue of S$5.51 billion and a 26% surge in operating profit to S$792 million on strong passenger demand, improved yields and passenger loads.
With record global travel demand keeping older aircraft in service and pushing up fuel and maintenance costs, higher operating expenses have partially offset the improvement in operational performance.
The airline's total expenditure rose 2.7% to S$4.71 billion, primarily driven by capacity expansion, higher fuel prices and increased uplift volumes.
Passenger operations remained the airline's growth engine, with Singapore Airlines and budget unit Scoot carrying 10.9 million passengers during the quarter, up 6.3% year-on-year.
The airline group's passenger yields - the average price a passenger pays to fly one kilometre (0.6 miles) - rose 1.9% to 10.9 Singapore cents per revenue passenger-kilometre, reflecting improving pricing power.
However, revenue at the group's cargo business declined 5.4% in the quarter to S$581 million as yields fell 6.2%. Its cargo load factor, a measure of how full cargo holds are, slipped marginally to 56.3% as capacity expansion outpaced demand growth.
"Sustained strength in passenger travel should help offset cargo softness and the share price should react positively given the convincing operating performance beat, though we remain watchful on Air India," said Tabitha Foo, equity research analyst at DBS Group Research.
Looking ahead, Singapore Airlines said demand for air travel remains "healthy" heading into the final quarter of FY2025/26, supported by seasonal travel. The carrier is expanding its network with new routes including Riyadh, Saudi Arabia, from June.
"We were expecting competition to intensify as airline capacity in Asia returned to pre-pandemic levels, but it appears some carriers are able to keep yields higher for longer," said Lorraine Tan, director at Morningstar.
($1 = 1.2663 Singapore dollars)
Net profit swings, but expenses stay firm for Singapore Airlines https://tmsnrt.rs/4l0XSq0
(Reporting by Kumar Tanishk, Nikita Maria Jino and Julie Zhu; Editing by Vijay Kishore, Jan Harvey and Susan Fenton)
((Tanishk.Kumar@thomsonreuters.com; tanishk.kumar@thomsonreuters.com X: @thatstanishk https://x.com/ThatsTanishk;))