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(Bloomberg) — Singapore Airlines Ltd. share’s slumped the most in almost a year after the carrier posted a sharp decline in quarterly profit.
The stock fell as much as 8.7% in early Singapore trading, the biggest intraday decline since Aug. 1, 2024. Net income dropped 59% to S$186 million ($145 million) in the three months ended June 30, the carrier said Monday. The weaker performance was largely due to losses at Air India, in which Singapore Air holds a 25.1% stake, and which wasn’t part of last year’s results.
An investigation into the fatal crash of Air India flight 171 in June is ongoing and the fallout is likely to continue to weigh on Singapore Air’s performance. The Indian carrier cut capacity in the short-term to deal with operational challenges in the aftermath of the disaster.
Despite the profit slide, Singapore Air remained positive about the months ahead, with robust demand across most regions in which it operates, though it did voice caution over geopolitical and macroeconomic volatility.
The carrier offers the first glimpse as to how the headwinds are playing out in Asia, with major Western airlines painting a mixed picture. Earlier this month, American Airlines Group Inc. scaled back its earnings outlook after deep fare discounts to entice reluctant travelers, while Delta Air Lines Inc. gave a more upbeat outlook about demand and United Airlines Holdings Inc. said customers have resumed booking flights.
Analysts had mixed reactions to Singapore Air’s results, ranging from Citigroup Inc.’s Kaseedit Choonnawat pointing to core profit missing estimates to Morgan Stanley’s Divya Gangahar Kothiyal predicting passenger yields may soon start stabilizing, helping ease competitive sales pressures.
JPMorgan Securities Asia Pacific Ltd.’s Karen Li said the results will likely be deemed a major miss and downgraded the stock to neutral with a price target of S$7.00. It was trading at S$7.02 at 9:20 a.m. local time, having fallen as low as S$6.94.
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