Singapore Airlines (SIA) reported record revenue of SG$20.5 billion ($16.06 billion) for the fiscal year ending March 31, driven by increased demand and reduced fuel costs. However, net profit fell 57.4% year-on-year to SG$1.18 billion, largely due to significant losses from its investment in Air India, which amounted to SG$945.2 million. Analysts suggest that while SIA’s foray into the Indian aviation market has been costly, it is a strategic move aimed at capitalizing on India’s growth potential.
Air India has faced multiple challenges, including operational disruptions and a staggering loss of SG$3.56 billion, which has weighed heavily on SIA’s financials since it began accounting for the airline in late 2024. Despite these hurdles, SIA’s CEO remains committed to supporting Air India’s transformation, indicating a long-term outlook for recovery.
Market professionals should note that SIA may need to inject additional capital into Air India to stabilize its operations, which could impact dividend capacity as earnings pressures mount. However, the long-term growth prospects in India’s aviation sector remain promising.
Source: cnbc.com