FUEL SUPPLY AND FARES
SIA was also asked about possible further airfare hikes in response to fuel cost pressures from the Middle East crisis. Executives remained non-committal, saying that “airfares are a function of supply and demand”.
“We want to price at a point that customers are still willing to buy, so we will have to watch the market carefully,” said chief commercial officer Lee Lik Hsin.
The group has said fare adjustments across SIA and Scoot’s networks do not fully offset the rise in jet fuel costs – its single largest expense. Its FY2025/2026 results capture only one month of fallout from the crisis, which flared up on Feb 28. The full impact is expected to feed through to FY2026/2027.
SIA on Thursday reported a 57.4 per cent drop in annual profit to S$1.18 billion for FY2025/2026.
The decline was largely driven by the absence of a S$1.1 billion one-time gain from the Vistara integration recorded in the year-ago period, compounded by losses from Air India.
On fuel supply, chief operations officer Tan Kai Ping said supply is stable across the network in the near term, but that there is no long-term visibility given the “very volatile” situation.
“The first thing that will happen when fuel supply runs short will be fuel rationing at airports,” he said, noting that this is not the case now.
Mr Goh said SIA has taken a different approach from other airlines that have cut capacity since the Middle East conflict began.
It has cut services to Dubai and postponed the launch of services to Riyadh, but announced additional capacity and frequency on other routes – particularly in Europe, where its network has grown around 13 per cent compared to before the start of the war against Iran.
“We are in a position where we don’t need to cut capacity,” said CCO Mr Lee. “Our financial position is strong, and therefore we are actually growing rather than cutting capacity.”
Editor’s note: An earlier version of this article stated that SIA had postponed the launch of services to Jeddah, which was the information provided at the briefing. The airline has subsequently said that the postponement applies to Riyadh, not Jeddah.