Concerns around passenger yield, drag from the crash of Air India flight 171 and rising non-fuel costs could weigh heavier
[SINGAPORE] Singapore Airlines (SIA) Group’s latest discounted tickets exercise may not be enough to boost its near-term earnings, said analysts.
The airline released more than 380,000 discounted tickets on Oct 24, with the sale set to end on Nov 6. Over 200,000 tickets were for SIA and the remainder for its low-cost subsidiary Scoot.
However, the group’s earnings will likely remain under pressure in the near term due to concerns around passenger yield, drag from the crash of Air India flight 171 and rising non-fuel costs, said analysts.
“This is a regular seasonal marketing exercise where SIA and Scoot routinely run large-scale fare promotions to secure a base load of bookings well in advance,” said DBS analyst Tabitha Foo.
She added that load factors have improved year on year in 2025, but yields have remained under pressure. This indicates SIA Group has been “effective in stimulating traffic through pricing”.
Yield refers to the average revenue an airline earns per passenger for each kilometre flown.
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Maybank analyst Eric Ong echoed the sentiment, stating that the sale will help boost the group’s passenger load factor amid heightened competition, especially from regional carriers.
“However, this suggests that passenger yield may continue to moderate, coupled with industry-wide capacity growth,” he added.
Foo added that she expects SIA’s earnings to “remain pressured in the near term” on yield concerns and drag from the Air India crash.
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Ong also said that Maybank will continue to monitor the group’s share of results of associated companies, notably from Air India, to “see if the losses continue to widen” and if there is any provision from the crash.
For the first quarter ended Jun 30, the net profit for SIA Group declined 58.8 per cent year on year to S$186 million from S$452 million. This was due to lower interest income and share of losses of associates. Analysts had downgraded its shares in response.
Rising non-fuel costs on the back of inflationary pressures could also partly offset the weaker US dollar and jet fuel prices, added Ong.
Still, not all is negative.
Foo said: “Forward bookings are still robust, and air travel demand continues to show resilience, barring a recessionary scenario, alongside lower jet fuel prices lending additional support to SIA’s margins.”
