SIA reiterates support for Air India despite drag on earnings

[SINGAPORE] Singapore Airlines (SIA) is unfazed by the challenges facing Air India and remains “very committed” to its investment in the associated company, even as the Indian carrier has become a drag on the Singaporean investor’s recent bottom line.

SIA chief executive officer Goh Choon Phong reiterated the group’s support for Air India at its post-results briefing on Friday (Nov 14).

He said Air India was a long-term investment, and that the group had no illusion that the journey would be free of challenges.

Asked about the maximum investment SIA would pump into the Indian carrier, or the maximum losses that SIA would tolerate from the associated company in which SIA owns a 25.1 per cent stake, he declined comment.

On whether Air India has asked for more funds and the amount that was sought, Goh said SIA would not disclose such discussions unless there was something to be announced.

Bloomberg reported that Air India had sought S$1.5 billion in financial support from its shareholders, with SIA’s implied 25.1 per cent share at S$376.5 million.

The Air India investment is a part of SIA’s long-term multi-hub strategy, providing the Singapore airline group exposure to India – the world’s third-largest aviation market. SIA could participate directly in India’s domestic and international markets, as well as unlock access to new traffic flows.

Air India was in the spotlight at SIA’s results briefing after the investment weighed on the Singapore carrier group’s earnings reported on Thursday.

At the operating level, the group posted a 22.5 per cent year-on-year improvement in profit to S$398.4 million, as revenue rose 2.2 per cent to S$4.9 billion for the second quarter of FY2026, ended September.

But net profit dropped sharply by 82.1 per cent to S$52.4 million, mainly due to share of losses from Air India, and a S$42 million reduction in interest income.

Earnings per share for the quarter dropped to S$0.017 from S$0.098 for the corresponding period, while net asset value per share was S$4.97 as at end-September, lower than the S$5.27 as at end-March.

Meanwhile, SIA’s budget carrier Scoot’s losses also affected the group’s profitability, as it swung to an operating loss of S$22.5 million from S$4.2 million for the year-ago period. This is Scoot’s second consecutive quarter of red ink.

Its passenger yield also declined by 7.8 per cent year on year to S$0.059 per km, with the accelerated drop coming after signs of a moderation.

Scoot’s CEO Leslie Thng said that the airline launched 12 destinations between April and September, and that the market would require time to absorb the capacity. Foreign currency impact also contributed to the lower yield as more regional currencies depreciated against the Singapore dollar during the period.

But he expects the decrease in yield to moderate in the second-half of FY2026 with the “strong” demand for Scoot’s existing and new routes.

On whether markets have recovered to pre-pandemic levels, SIA chief commercial officer Lee Lik Hsin said markets, including China, have improved to the levels before the pandemic, as seen in the “very strong” load factors.

He said: “Of course, market to market, there are variations... If you look at our Chinese flights load factors, those have also recovered to pre-Covid levels. They are in the mid-80s now.”

SIA shares fell 3.6 per cent in early trading on Friday and closed 2 per cent or S$0.13 lower at S$6.52.