Profit at Singapore Airlines down as geopolitical uncertainties take their toll on revenues

Despite the fact that Singapore Airlines and Scoot achieve record passenger numbers amid robust demand for air travel during the first quarter of the financial year 2025, economic uncertainties fueled by geopolitical instability as well as overcapacity in Asia weight on passenger yields.

Singapore Airlines group net profit was down 59% due to lower interest income and share of losses of associates.

Singapore Airlines Group reported revenue of US$3.54 billion (S$ $4.79 billion) for the quarter ended 30 June 2025, a year-on-year increase of US$53 million (+1.5%). This result was driven by sustained demand for both passenger and cargo services despite economic and geopolitical headwinds.

Declining passengers’ yield

SIA and its low-cost arm Scoot carried a record 10.3 million passengers, up 6.9% from the same period last year. Group passenger load factor rose 0.7 percentage points to 87.6%, as traffic grew 4.1%, outpacing a 3.3% rise in capacity.

However, passenger yields declined 2.9% to 7.4 US cents per revenue passenger-kilometre. It is the result of an intensifying competition from airlines in the region, which increased their capacities. But it might also reflect a more careful attitude of travelers. confronted by a desire to save on fares as the economic situation looks increasingly unstable.

Group expenditure rose US$102 million (+3.2%) to US$3.24 billion, mainly due to higher non-fuel costs, which increased US$182 million (+8.5%) amid a 3.7% growth in overall capacity and inflationary pressures. Net fuel costs, however, decreased by US$80 million (-7.9%) owing to a 16.9% drop in fuel prices (US$186 million), partially offset by increased fuel consumption (+US$52 million) and a reversal in hedging outcomes, shifting from a gain to a US$81 million loss.

Operating profit for the quarter stood at US$300 million, down US$48 million (-13.8%) from the same quarter last year.

Net profit saw a steeper decline, plunging US$197 million (-58.8%) to US$138 million. This was largely due to lower operating profit, reduced interest income (US$45 million) linked to diminished cash reserves and lower interest rates, and a swing to a US$90 million share of losses from associated companies.

Jet Star Asia closure offers an opportunity to expand for Scoot

As of 30 June 2025, the Group’s operating fleet comprised 204 passenger
and freighter aircraft with an average age of seven years and nine months. SIA operated 144 passenger aircraft and Scoot 53 passenger aircraft.

During the quarter, Scoot added one Airbus A321neo, one Boeing 787-8, and one Embraer E190-E2 aircraft to its fleet. The Group has 72 aircraft on order at the end of this quarter.

Network addition saw Scoot beginning operations to Iloilo City (Philippines) and Vienna (Austria). As of 30 June 2025, the Group’s passenger network covered 129 destinations in 37 countries and territories. SIA served 78 destinations and Scoot served 73.

With the closure of Jetstar Asia on July 31, 2025, Scoot looks also at boosting its network. The airline recently announced plans to launch services to Danang (Vietnam) and Kota Bharu (Malaysia) in October 2025. Nha Trang (Vietnam) will follow in November 2025.

The Group currently works at ramping up capacity to various Asian destinations? It includes Malaysia, the Philippines, Sri Lanka, and Thailand in a bid to maintain a strong Singapore hub connectivity. This includes Scoot commencing operations to Labuan Bajo and Medan (Indonesia), as well as Okinawa (Japan), subject to regulatory and operational approvals.

SIA Group management sees demand for air travel remaining 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. Challenges range from geopolitical developments and macroeconomic fluctuations to changing market dynamics and supply chain constraints.

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