Singapore Airlines Shares Slide Over 8%

Singapore International Airlines (SIA) shares slumped more than 8% after reporting a steep 59% plunge in net profit for the quarter ended June 30. 

The flag carrier’s net earnings dropped to US$144 million, down from a significantly stronger position a year earlier. The decline was mainly because of lower interest income due to shrinking cash reserves and reduced rates, alongside a sharp turnaround from profit to loss in its associate holdings, especially its affiliate Air India.

The stock registered its sharpest single-day decline since August 2024, now trading 7.11% lower. Operating profit fell 13.8% year-on-year, with margins under pressure as post-pandemic normalization continues. 

Singapore Airlines began equity accounting for its 25.1% stake in Air India following the latter’s merger with Vistara in late 2024. Losses at Air India, exacerbated by a Boeing Dreamliner incident and a subsequent 20% drop in bookings, are now sitting on SIA’s bottom line.

Cargo revenue also softened, falling nearly 2%. Despite ongoing geopolitical uncertainty, SIA reported that demand for passenger and cargo travel remains resilient, especially in the peak summer period. 

What Does This Mean for Me?

Yet, the competitive landscape, rising costs, and weaker cargo performance prompted prominent analysts to cut its profit forecasts by up to 29% over the next three years. They have downgraded SIA to a sell, setting a target price of S$6.75, below the current S$7.08.

While the group maintains confidence in its balance sheet and operational depth, market analysts are clearly unconvinced, warning that current valuations may no longer reflect fundamentals amid mounting near-term headwinds.