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Singapore Airlines (SIA) stock price has been experiencing turbulence due to various factors. SIA shares tumble 7.4% after first-quarter profit slide. SIA results were hit by its share of losses from associate Air India, although the Singapore business performed well.

Net profit fell to 186 million Singapore dollars ($144 million) for the quarter ended June 30, according to the company's earnings report. The drop was attributed to reduced interest income and losses from its associates. Its operating profit in the first quarter also fell 13.8% to S$405 million year over year. "In addition to the lower operating profit, the reduction in net profit was largely attributable to a lower interest income on the back of lower cash balances and interest rate cuts, and the Group recording a share of losses of associated companies compared to a share of profits for the same quarter last year," SIA said in its earnings statement.

⬇️ AIR INDIA DRAG ⬇️

Singapore's flagship carrier also noted that the loss stemmed from Air India's financials, which were not included in the group's results for the same quarter in 2024. SIA has a 25.1% stake in Air India following its November 2024 merger with rival Vistara, which it co-owned with India's Tata Sons. SIA began equity accounting for the airline from December 2024. "Air India losses were significantly deeper than expected and are unlikely to ease in the near term as the airline navigates a complex restructuring alongside reputational damage," Tabitha Foo, equity research analyst at DBS Bank, told CNBC.

"Following the [Boeing] Dreamliner incident in June, Air India reportedly saw a 20% drop in bookings across domestic and international routes," she said, adding that average fares dropped 8% to 15% while cancellations rose, especially among corporate and premium leisure travelers. Foo noted that most of the costs associated with the crash of Air India Flight 171 should be covered by insurance. Yet, "Air India is still likely to remain a near-term drag on SIA's bottom line," she said. The negative pull by Air India's financials isn't surprising, said Brendan Sobie, an independent analyst at Sobie Aviation. He noted that the Vistara-Air India merger helped boost net profits for SIA Group to a record S$2.78 billion in the previous financial year, which ended in March. "In this latest quarter, you now have a net loss from Air India. It's just impacting the net figures," he said. "The operating figures ... provide a better indication of how SIA and the market here are doing."

I used to be a shareholder of SIA with huge stakes in it, but not anymore. SIA should exercise more financial prudence instead of handing out big fat paychecks and bonuses to its staff. The handouts are ridiculously huge compared to other sectors, and as a shareholder, I'm out. It's just not sustainable.

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