Air India losses narrow, but Singapore Airlines’ profit falls 44% as fuel costs rise

Singapore Airlines’ losses linked to Air India narrowed in the first half of the year, but the carrier’s overall net profit still fell nearly 44% as Middle East tensions pushed up jet fuel prices.

Singapore Airlines reported a net profit of S$134 million ($104.56 million) for the six months ended Wednesday, compared with S$239 million during the same period a year earlier. Analysts polled by Visible Alpha had expected a lower profit of S$65.3 million.

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The airline’s share of Air India’s losses fell to S$361.7 million from S$429.5 million a year earlier. Losses from other associates also narrowed, helping partly offset the impact of higher fuel expenses.

Singapore Airlines’ total costs rose more than 20% to S$10.73 billion. Fuel costs before hedging increased by more than 90%, with average jet fuel prices rising 86.7% year-on-year to US$171 per barrel.

The airline said its results were also affected by weaker performance in the first quarter.

Revenue for the first half rose 16.8% to S$11.30 billion from the year-earlier period.

Singapore Airlines said Air India had made tangible progress in its multi-year transformation, while cautioning that the turnaround would take time. The airline's key shareholder said both Tata Sons and Singapore Airlines remained committed to supporting the Indian carrier's efforts to achieve profitable growth.

"SIA, and its partner, Tata Sons, recognise that a transformation of this scale will take time.

"Both partners continue to work closely to support Air India's journey towards profitable growth, including strengthening structural cost efficiencies, unlocking greater synergies between Air India and Air India Express, sharpening its commercial strategy to navigate current external challenges, and elevating its customer proposition," the release said.

As part of its cost-control efforts, Air India set up a multidisciplinary team in October to identify savings opportunities. The airline's new CEO and MD, Tewolde Gebremariam, also urged employees to adopt a mindset of frugality and accountability across their work.

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Air India has been undergoing a multi-year transformation since the Tata Group took control of the former state-owned carrier in 2022. The programme includes integrating the group’s airlines, refurbishing older aircraft, adding new planes and expanding its international network.

However, the turnaround has resulted in substantial costs. Air India’s consolidated loss widened to ₹22,238 crore in the financial year ended March 2026 from ₹10,859 crore a year earlier.

Against this backdrop, Tata Sons’ board has approved in principle a fresh capital infusion of more than ₹10,000 crore into Air India. The funding is subject to conditions, with the airline required to present a business case when it seeks the money, according to a report by The Economic Times citing people familiar with the matter.

Air India has also been seeking around ₹10,000 crore in fresh loans from banks to fund fleet expansion, aircraft refurbishment and operating expenses. Some lenders have sought greater clarity on the airline’s cash flows and turnaround plans before extending new loans.

Separately, Reuters reported in August that Air India was seeking about $1.5 billion in fresh equity from Tata Sons and Singapore Airlines. Discussions were ongoing at the time, and no final decision had been taken. Singapore Airlines would be expected to consider contributing in line with its stake in Air India.

Singapore Airlines and Air India have continued to deepen their commercial relationship despite the financial challenges. In January, the two airlines signed an agreement to expand cooperation and explore a broader joint business arrangement. In October, they widened their partnership to cover 126 weekly flights between Singapore and eight Indian cities, while also expanding booking and frequent-flyer benefits.

For Singapore Airlines, the Air India investment has affected its financial performance beyond the latest half-year results. In the financial year ended March 2026, it recorded a S$945.2 million share of losses from Air India, according to its annual report. Its annual profit also declined partly because a one-time accounting gain from the Air India-Vistara merger was not repeated.

Singapore Airlines also flagged the challenging operating environment facing the global aviation industry, pointing to geopolitical uncertainty and the ongoing conflict in the Middle East as factors affecting operations and supply chains.

"Jet fuel prices remain elevated relative to pre-conflict levels, and continue to place significant pressure on costs. While the Group has adjusted air fares and cargo rates, these measures do not fully offset the impact of sustained high fuel prices," it said.

The airline warned that a prolonged conflict could have wider implications for the global economy, potentially adding to inflationary pressures and affecting demand for passenger travel and air freight.

However, Singapore Airlines said it was positioned to withstand the volatility, citing its diversified international network and broad mix of traffic flows.

"The Group is in a strong position to navigate this volatility. Its diversified global network and broad mix of traffic flows help to cushion shifts in demand...," it added.