Losses at struggling Air India helped to drag down profits at Singapore Airlines last year, even as the city-state’s flagship carrier reported record revenue and passenger traffic.
SIA reported a 57.4% drop in net income to 1.2 billion Singapore dollars ($927 million) for its 2025 fiscal year, which ended in March. Profits were partially eroded by a loss of 945 million Singapore dollars ($739 million) from SIA’s investment in Air India. The airline still reported record revenue of $20.5 billion, buoyed by strong global demand for air travel. SIA and its low-cost subsidiary Scoot carried 42.4 million passengers.
“We have been operating within India for a long time, so we know the market and how difficult it feels,” said CEO Goh Choon Pong at a May 15 press briefing, following the release of the company’s earnings the day before. Yet he claimed the market still holds “tremendous potential,” citing a growing middle class, set to surpass 800 million by 2047, and a proliferation of new airports.
SIA first ventured into India in 2013 through a joint venture with Tata Sons, setting up Vistara, a luxury carrier.
Tata later took over the beleaguered state-owned Air India in 2022, and appointed Campbell Wilson, a long-time SIA executive and CEO of Scoot, as its CEO. The Indian company then integrated Vistara into the national carrier, turning SIA’s 49% stake in Vistara into a 25.1% stake in the larger Air India group.
Despite a boom in outbound tourism, Air India reported a record loss of $2.8 billion in its 2025 fiscal year, after a year of scrutiny on the airline following the AI171 crash in Gujarat, India, which killed 260 people. The airline has also lost its CEO: Wilson resigned from the position in April, though he will remain in the role until Air India’s board finds a successor.
“The airline is significantly reducing frequencies—especially of international flights, but also domestic flights—while they relook all their processes,” Goh said. SIA has seconded team members to Air India to help make it “a world-class carrier with an Indian heart.”
Air India has also been pressured by Pakistan’s decision to bar Indian airlines from accessing its airspace, following a brief conflict with India last year. That closure forces Indian airlines to take longer routes to Europe and the U.S., pushing up flight times and jet fuel costs.
The Indian rupee has also plunged against the U.S. dollar, making fuel and other imported goods more expensive. “Most of our expenditure, particularly for fuel and aircraft, is in U.S. dollars, so these are certainly headwinds,” Goh said. (High U.S. tariffs and a worsening trade deficit helped make the rupee Asia’s worst-performing currency last year.)
Flagging fuel costs
Jet fuel prices have surged since the U.S. and Israel launched strikes on Iran in late February. Much of the Middle East’s oil exports have remained trapped behind the Strait of Hormuz, currently blocked by Iran. In response, countries like China and South Korea imposed export bans on refined fuel products, including jet fuel.
In a May 14 stock exchange filing, SIA cautioned that it has yet to experience the full effect of higher jet fuel prices, caused by the conflict in Iran and the closed Strait of Hormuz; such effects will likely emerge in the company’s next set of quarterly results.
“In March, jet fuel costs more than doubled,” said CFO JoAnn Tan during the airline’s May 15 press conference. “However, because it only affected one month on a full-year basis, jet fuel prices before hedging were still lower as compared to last year.” SIA did not give a forecast as to how rising fuel prices might affect its future results.
Air New Zealand on May 13 forecast its largest annual loss in four years, blaming higher fuel prices. Japan Airlines and All Nippon Airways (ANA) have also announced fuel surcharges for international flights booked in May and June. (Not everyone is under strain: Hong Kong’s Cathay Pacific recently announced that it would remove its emergency fuel surcharge.)
SIA does see one benefit from the Iran crisis. The airline will increase the frequency of flights between Singapore and four European destinations, and will launch a new service to Madrid. (Both Middle Eastern and European carriers are struggling with widespread airspace closures following the Iran conflict.)
“We were able to tap into some of the spillover traffic from the Middle Eastern carriers for some of our long-haul routes, in particular [on flights to and from] Europe, the U.S., and Australia,” SIA chief commercial officer Lee Lik Hsin said during the briefing.
Other Asia-Pacific airlines are also eagerly trying to capture market share from struggling competitors. Cathay Pacific is also adding flights to Europe, while Qantas is expanding capacity to New Zealand.
Singapore Airlines shares rose 2.4% on May 15, though they are still down by 6.7% over the past 12 months.
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