(Reuters) -Singapore Airlines on Monday flagged unpredictable demand for its cargo segment in the second quarter due to tariffs, while it posted a 58.8% fall in net profit during the three months to June.
The carrier largely attributed the reduction in net profit to a S$122 million loss in associated companies, primarily due to Air India’s financials, which were not part of the group’s results in the year-ago quarter, and lower cash balances.
Singapore Airlines began equity accounting for Air India in December last year after Vistara’s full integration into Air India.
The company’s net profit came in at S$186 million ($144.89 million) for the first quarter ended June 30, compared with S$452 million a year earlier and a Visible Alpha consensus estimate of S$463.2 million.
“The demand for air travel remains healthy in the second quarter of FY2025/26 across most route regions due to the traditional summer peak,” it said. “However, the global airline industry continues to face a volatile operating environment, with challenges ranging from geopolitical developments and macroeconomic fluctuations to changing market dynamics and supply-chain constraints.”
Its cargo revenue dropped 1.9% during the first quarter as pricing fell 4.4%. The cargo load factor — a measure of how full cargo holds are — slipped 0.8 percentage point to 56.9%.
Total revenue rose 1.5% to S$4.79 billion, while passenger yields slipped 2.9% amid heightened competition.
Singapore Airlines said it would ramp up capacity to various Asian destinations, including Malaysia and the Philippines, following the closure of Qantas Airways’ Singapore-based budget airline Jetstar Asia on July 31.
Separately, industry estimates suggest that the crash of the London-bound Air India jet in India’s western city of Ahmedabad last month might generate significant insured losses that could reach $500 million.
($1 = 1.2837 Singapore dollars)
(Reporting by Shivangi Lahiri and John Biju in Bengaluru; Editing by Sherry Jacob-Phillips and Shilpi Majumdar)
