Singapore Airlines Profit Falls 44% as Fuel Surge Outpaces Record Revenue

Record sales meet a much larger fuel bill

Singapore Airlines Group earned S$134 million in the six months ended September 30, 2026, a decline of 43.9% from S$239 million a year earlier, as sharply higher jet fuel prices overwhelmed gains from record revenue and smaller losses at Air India.

The results, announced on November 11, showed how an airline can carry more passengers, charge higher fares and still earn less. Revenue rose 16.8% to S$11.30 billion, supported by record passenger volumes and strong cargo demand. Spending increased faster, climbing more than 20% to S$10.73 billion.

Average jet fuel prices reached US$171 a barrel during the half year, up 86.7% from the same period a year earlier amid the Middle East conflict. The group's fuel costs before hedging jumped more than 90%. Hedging means using financial contracts to reduce exposure to changes in fuel prices.

Net profit nevertheless came in at more than twice the S$65.3 million consensus forecast compiled by Visible Alpha. A stronger second quarter and a reduction in the group's share of losses from Air India helped soften the damage.

Passengers and shareholders face different consequences from the same squeeze. Travelers have already encountered fare increases and suspended routes, while investors are receiving lower earnings despite rising sales. Singapore Airlines announced an interim dividend of 2 Singapore cents per share and a special dividend of 5 Singapore cents, bringing the combined announced distribution to 7 Singapore cents per share.

Why higher fares have not covered fuel costs

Singapore Airlines said it had adjusted passenger fares and cargo rates, yet those changes had not fully covered the effect of sustained high fuel prices. The increase in revenue therefore came with a much heavier cost of operating flights.

The group described the pressure in its results statement:

Jet fuel prices remain elevated relative to pre-conflict levels, and continue to place significant pressure on costs.

Airline pricing moves at a different speed from fuel markets. A seat may have been sold weeks or months before departure, while corporate customers may travel under negotiated contracts. Competition also limits how quickly an airline can raise prices without losing bookings.

Fuel, meanwhile, must keep being purchased to operate the schedule. A sudden price jump can increase the cost of carrying passengers whose tickets were sold when fuel was cheaper. This timing gap helps explain why stronger sales have not translated into stronger profit.

The US$171 average was about US$79 higher than the roughly US$92 implied by the previous year's figure. Put simply, fuel that previously cost about US$100 would cost roughly US$187 at the reported rate of increase. The actual fuel bill also depends on how much an airline consumes and the effect of its hedging contracts.

Persistent high prices could bring further increases in base fares or fuel surcharges as airlines seek to recover costs. Singapore Airlines has already raised fares and cargo rates, but it did not announce a specific new surcharge in these results.

A stronger second quarter limits the decline

Singapore Airlines earned S$210 million in the second quarter, an increase from a year earlier, supported by stronger operating profit and smaller losses from associated companies. Revenue for that quarter rose 14.3% to S$5.58 billion.

The quarterly figures reveal how uneven the half year was. Subtracting the S$210 million second quarter profit from the S$134 million half year total implies a first quarter net loss of S$76 million. The later improvement therefore helped recover an earlier setback.

Passenger demand remained healthy, supported by seasonal travel flows, while air cargo demand also contributed to revenue growth. Singapore Airlines continued to attract business even as the cost of providing that service increased.

The group pointed to its diversified international network and broad mix of traffic flows as protection against shifts in demand. Serving many markets gives it access to different sources of passenger and freight business when conditions weaken in a particular region.

Revenue and net profit measure different things. Revenue is the money brought in from business activities; net profit is what remains after expenses and other accounting items, including the group's share of losses at associated companies. The latest results show why both figures matter when judging the airline's performance.

Air India's smaller losses provide some relief

Singapore Airlines recorded a S$361.7 million share of Air India's losses in the half year, compared with S$429.5 million a year earlier. The reduction of S$67.8 million, or about 15.8%, provided meaningful relief while leaving a substantial charge against earnings.

An associated company is a business in which an investor has a substantial interest and influence. Singapore Airlines includes its share of Air India's financial result in its own accounts, so the Indian carrier's progress affects the Singapore group's profit.

Air India's wider financial position remains difficult. Its consolidated loss reached 22,238 crore rupees in the financial year ended March 2026, compared with 10,859 crore rupees a year earlier. Those figures equal 222.38 billion rupees and 108.59 billion rupees respectively, meaning the annual loss more than doubled.

Singapore Airlines recorded a S$945.2 million share of Air India's losses for that financial year. Its annual profit also fell partly because an accounting gain from the Air India and Vistara merger, recorded in the preceding year, did not recur.

The annual figures and the latest half year figures cover different periods. Together, they show a large annual loss followed by some improvement in the more recent contribution to Singapore Airlines' accounts.

Air India's turnaround needs money and cost savings

Tata Group took control of Air India in 2022 and began a transformation involving airline integration, refurbishment of older aircraft, new planes and international expansion. Those changes require substantial spending while the carrier is still losing money.

Singapore Airlines addressed the length of that process in its statement:

SIA, and its partner, Tata Sons, recognise that a transformation of this scale will take time.

The partners are working on structural cost savings, closer coordination between Air India and Air India Express, commercial strategy and customer service. Air India established a team drawn from several disciplines in October to identify savings. Its new chief executive and managing director, Tewolde Gebremariam, also urged employees to make frugality and accountability part of their work.

Gebremariam, who led Ethiopian Airlines Group for 11 years, was named in August 2026 to succeed Campbell Wilson and received the required security clearance at the end of September. At his first town hall on September 28, 2026, he set safety, reliability, profitability and disciplined growth as priorities.

Tata Sons' board has approved in principle a fresh capital contribution exceeding 10,000 crore rupees, equivalent to more than 100 billion rupees. The approval carries conditions, including a requirement for Air India to present a business case when seeking the money.

Air India has also sought around 10,000 crore rupees in bank loans for fleet expansion, aircraft refurbishment and operating expenses. Some lenders have requested greater clarity about its cash flows and turnaround plans before extending credit.

Discussions reported in August concerned about US$1.5 billion in fresh equity from Tata Sons and Singapore Airlines, with no final decision at that time. These financing figures describe proposals and conditional approvals, rather than a single completed funding package.

Commercial cooperation continues to expand

Singapore Airlines and Air India have continued developing their commercial relationship despite the losses. In January, they signed an agreement to expand cooperation and explore a broader joint business arrangement.

In October, their expanded partnership covered 126 weekly flights between Singapore and eight Indian cities. They also widened booking and frequent flyer benefits, giving customers more ways to use the two networks.

For passengers, closer cooperation can make connecting journeys and loyalty benefits easier to manage. For the airlines, it creates more opportunities to sell travel across their combined networks while Air India works to improve its finances.

The developments span several stages of Air India's ownership change and the current earnings period:

• 2022: Tata Group took control of Air India and began its transformation programme.
• January 2026: Singapore Airlines and Air India agreed to expand cooperation and explore a broader joint business arrangement.
• March 2026: Air India's financial year closed with a consolidated loss of 22,238 crore rupees.
• September 30, 2026: Singapore Airlines Group's latest half year reporting period ended.
• October 2026: The partnership expanded to cover 126 weekly flights, and Air India established a team to seek cost savings.
• November 11, 2026: Singapore Airlines announced its half year results and dividends.

Middle East disruption reaches the flight schedule

Scoot's services to Jeddah and Singapore Airlines' flights to Dubai remained suspended, while the planned launch of Riyadh services was deferred. The conflict is therefore affecting where the group flies as well as how much fuel costs.

Asian travelers were already experiencing flight cuts and higher fares in April, when more than 150,000 flights had been removed from global schedules covering March through June 2026. Eleven of the 20 airlines making the largest schedule cuts were based in Asia, according to aviation data firm Cirium.

At that stage, jet fuel had climbed from roughly US$93 a barrel before hostilities began on February 28 to more than US$190 at peak levels. The latest Singapore Airlines results put a financial figure on the pressure that persisted through the half year.

Singapore Airlines also warned that a prolonged conflict could affect the wider economy. More expensive energy can increase business and household costs, leaving less money for travel and changing demand for goods transported by air.

The group described that risk in its statement:

An extended conflict could also have spillover effects on broader macroeconomic conditions, potentially leading to further inflationary cost pressure and affecting demand for passenger travel and air freight.

What the results mean for travelers and investors

Travelers face a combination of higher prices and fewer options on affected Middle Eastern routes. Healthy demand has supported Singapore Airlines' sales, but the company is still absorbing fuel increases that fare and cargo rate adjustments have not fully covered.

Investors have two major developments to watch: the persistence of high fuel costs and Air India's need for further financial support. The stronger second quarter and smaller share of associate losses improved earnings, while the half year result shows how much pressure remains.

Singapore Airlines enters the next reporting period with record half year revenue, continued passenger demand and a broader partnership with Air India. Its ability to turn that business into profit will depend on the cost of flying and the pace of improvement at its Indian associate.

Key Points

• Singapore Airlines Group's half year net profit fell 43.9% to S$134 million, beating the S$65.3 million consensus forecast.
• Revenue rose 16.8% to a record S$11.30 billion, while expenditure increased more than 20% to S$10.73 billion.
• Average jet fuel prices reached US$171 a barrel, and fuel costs before hedging rose more than 90%.
• Second quarter profit of S$210 million helped offset an implied first quarter loss of S$76 million.
• The group's share of Air India losses narrowed to S$361.7 million from S$429.5 million.
• Dubai and Jeddah services remained suspended, and the launch of Riyadh services was deferred.
• The announced interim and special dividends total 7 Singapore cents per share.