Time flies! It has been nearly three years since my last deep dive into
SIA on 14 June 2023. Back then, the carrier was soaring on a post-pandemic tailwind, with SIA share price peaking at
$7.80 just two days later. Fast forward to April 2026, the landscape has changed dramatically with the Iran war causing fuel price to spike. While SIA continues to fly record passenger numbers, SIA share price has suffered volatile swings and a failure to reclaim those 2023 highs. In this article, I will share why SIA share price could be in trouble.
It is well-known that SIA has spent decades trying to enter India market through its joint venture with Tata, Vistara, since 2015. Following Tata&rsquo s acquisition of the state-owned Air India in early 2022, SIA and Tata agreed to merge Vistara into Air India. In my view, the deal is a double-edged sword. While India provides massive hinterland for SIA to grow, it also exposes SIA to significant risk.
As of this month, Air India has reported record losses (roughly
S$3 billion for the 2025/26 financial year). Given SIA&rsquo s 25.1% stake in Air India, this represented an estimated
loss of S$750 million for SIA. The SIA-Air India saga in 2026 is almost a perfect rhyme of the Singtel-Bharti Airtel crisis of 2019/2020. Back then, Bharti Airtel was hit by a massive regulatory blow and a brutal price war with Reliance Jio. Singtel had to take a massive non-cash impairment of nearly
S$2 billion, dragging their profits to a record low.
It took Bharti Airtel more than 5 years to survive the price war in India. Today, Airtel went from &ldquo surviving&rdquo to &ldquo thriving&rdquo , providing Singtel a massive &ldquo ATM&rdquo to fund growth. It remains to be seen if Air India would turn out to be an &ldquo ATM&rdquo for SIA but the Indian market is too big to ignore. Additionally, Air India is a strategic asset for SIA to prevent its Middle East rivals (Emirates, Qatar, Etihad) from dominating the Indian passenger flows.
As a matter of fact, SIA enjoyed robust passenger traffic in March 2026 due to the Middle East conflict. Combined passenger carriage increased 14.9% year-on-year to 3.8 million passengers, representing a new monthly record for the Group. On this note, Air India could be a vital key to unlock growth in the long-term.
While the Middle East conflict has been a tailwind for SIA, it also triggered largest energy supply shock in history as the Strait of Hormuz has turned the energy market upside down.
Investors must be horrified to learn that fuel prices surged past
US$100 per barrel in early March and peaked as high as US
$126. As of April 25, 2026, it' s hovering around
US$105&ndash US$106, roughly a
60% increase compared to this time last year.
But what really walloped SIA share price was the spike in jet fuel, which purportedly nearly doubled to US200 per barrel. The surge in jet fuel caused SIA share price to decline from $7.20 on 27 February 2026 (the start of the Iran war) to the current $6.40. In this article, I will share my insight on SIA share price in 2026.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in SIA before. Whether SIA share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
SIA share price faces destiny
Investors must be feeling frustrated as the Iran war has virtually wiped out all the gains for SIA share price since the start of the year. To make matters worse, SIA share price should be in plenty of volatility due to the spill-overs from the Iran war &ndash global economic slowdown and high jet fuel price. In my opinion, 14 May 2026 might be destiny day for investors as SIA delivers its full year financial results for the year ended 31 March 2026.
Based on the 9MFY2025/26 financial result, the net profit amounted to $743.1 million. Whilst SIA incurred losses of $780 million from its 25.1% stake in India, it was non-cash that would be shown in the Income Statement. The problem is that SIA is facing massive pressure to pump capital injection to Air India to the tune of
$380 million.
Assuming SIA decided to push ahead with the capital injection, and also accounting for the fuel price hike and increased passenger growth, I estimate that full-year net profit could be $950 million to $1 billion. This represented about 64% drop in net profit. Surely, the headline news would knock the wind out of SIA share price.
But the litmus test should arrive after the full-year reporting as the amount of fuel hedge dropped from 47% in the quarter to March, and then reducing to 24% in the second half of the full-year to 2027.
Record revenue for FY2025/26
When SIA delivers the full-year financial result, it will be a case of headline not telling the full story &ndash record revenue but massive drop in net profit. For the first nine months of FY2025/26, SIA has already achieved a record revenue of $15.1 billion, driven by higher passenger revenue. Capacity has grown 2.9% while passenger load factor increased 1.1% to 87.7%.
The closure of Jetstar Asia has benefitted Scoot due to the reduced competition in the low-cost carrier landscape. In fact, Scoot has taken over some of the routes that were previously the strongholds of Jetstar, namely Okinawa and Labuan Bajo. Previously, Jetstar held about 7-8% of the passenger traffic at Changi Airport. With its exit, Scoot has effectively survived the brutal price war.
In the first half of the year, Scoot was struggling with " yield compression" (falling ticket prices). However, by the end of the 9-month period (Q3 FY25/26), Scoot achieved a
6.5% year-on-year increase in RASK (Revenue per Available Seat Kilometer). This suggests that the " price war" stabilized, and Scoot regained its ability to charge higher fares on key routes.
Despite lesser competition, Scoot recorded operating profit of just $9 million for 9M FY2025/26, a whopping 64% year-on-year decrease. The drop should be attributed to the initial costs of fleet expansion using the new Embraer E190-E2 aircraft and the launching costs of the new routes. The full-service carrier remained the key profit contributor as operating profit amounted to a gigantic $1.58 billion, an increase of 13% year-on-year.
In terms of balance sheet, the Group remained disciplined as total debt balances was reduced to $2.5 billion, reducing the Group&rsquo s debt-equity ratio from 0.82 to 0.66 times. Cash and bank balances declined $2.2 billion to $6.1 billion, but these were partially offset by $2.8 billion of net cash generated from operations. Given the
huge cash pile of over $6 billion, SIA has the strongest balance sheet in the region.
Conclusion
Its going to be another rough ride for SIA in the near future given the geopolitical conflicts and economic uncertainties. The " first mover advantage" that SIA enjoyed in 2022 and 2023&mdash when it was one of the few airlines with a fully restored fleet while competitors were still grounded&mdash has effectively ended.
Back in 2023, SIA could dictate prices because demand far exceeded supply. Now, most of its competitors have restored capacity to pre-pandemic levels. Nevertheless, SIA somehow managed to preserve its passenger yield as passenger yields rose 1.9% to 10.9 cents per revenue passenger-kilometre.
The real risks that could impact SIA&rsquo s net profit are actually inflation, fuel costs and Air India. Traditionally, staff and fuel costs made up the bulk of the airline&rsquo s expenditure. So, if wages and fuel costs continue to rise, the airline would be impact. Additionally, I foresee it may take at least 3 to 4 years to turnaround Air India, which is in a pretty big mess with the CEO Campbell Wilson throwing in the towel and the scrutiny from the authorities after the 787 crash in 2025.
To be honest, I have never like investing in airlines because the business is too prone to many external risks &ndash economic downturns, pandemic flu, oil price hikes and market competitions. As a small country with no domestic market to speak of, SIA&rsquo s growth also hinges on the overall government hub strategy. Notwithstanding these factors, it is possible to make money with this counter, provided you set the appropriate entry and exit levels. Till then, enjoy the ride.
Post Reply
21-40 of 308
