Singapore Airlines (SIA) reported a 57.4% decline in full-year net profit for the year ending March 31, 2026, to S$1.18 billion (US$927 million), exceeding analyst estimates of S$1.08 billion despite the large drop [1, 2, 3, 4, 5]. The profit fall was mainly due to widening losses at associate Air India, where SIA holds a 25.1% stake, combined with disruptions from the Iran war and airspace closures in the Middle East that drove jet fuel prices sharply higher [1, 2, 3, 4, 5].
Air India recorded a loss of about US$2.8 billion (S$3.56 billion) in 2025/26, its largest since acquisition by Tata Group in 2022, according to multiple sources, though one source cited a loss just over US$2 billion, introducing some uncertainty [3, 6, 5]. The Middle East conflict, including the closure of the Strait of Hormuz, caused jet fuel prices to more than double and severely limited airspace availability, forcing Air India to cut about 27% of its international flights during the peak summer period to destinations across North America, Europe, Australia, and Asia [3, 4, 7, 5].
SIA's own operations remained strong despite the external pressures. Its operating profit rose 39% to S$2.375 billion, supported by a 5% increase in total revenue to a record S$20.52 billion as passenger traffic reached 42.4 million for the year [2, 3, 4, 5]. However, fuel cost increases amounted to S$5.168 billion pre-hedging, and fare increases have been unable to fully offset rising fuel expenses, SIA said [3, 5]. The full impact of elevated fuel prices is expected to appear in the next fiscal year given lagged fuel contract pricing [3, 4, 8, 5].
SIA plans to expand capacity further in 2026/27 by adding six aircraft, targeting Europe among other regions as it reroutes passengers around Middle East hubs affected by ongoing airspace restrictions [8]. The group reaffirmed its commitment to its 25.1% Air India stake, calling the turnaround a "long and difficult battle" with "no shortcuts" and emphasizing the investment's role in its multi-hub strategy [3, 8].
Total dividends announced for 2025/26 were 37 Singapore cents per share, including a 10-cent special dividend, with similar special payouts expected over the next two years [4, 8, 5]. SIA cut its employee bonus to 5.7 months from 7.45 months in the prior year, reflecting the challenging environment [4]. Meanwhile, the Indian rupee hit record lows against the US dollar amid inflationary pressures from higher aviation fuel import costs linked to the Middle East conflict [7].
The outbreak of the US-Israeli war on Iran in late February 2026 and the closure of the Strait of Hormuz marked a turning point, triggering a spike in jet fuel prices and airspace restrictions that affected performance across the sector [3, 4, 7, 5]. SIA's board plans to propose a final dividend payout including the special dividend on August 28, 2026 [4].
