Broker: Maybank Research Pte Ltd
Date of Report: June 13, 2025

Singapore Airlines Faces Turbulence: Financial Outlook, Market Impact, and Peer Analysis for 2025

Overview: External Headwinds Stall Singapore Airlines’ Share Rally

Singapore Airlines (SIA) is encountering significant external pressures just as its shares outperformed the broader market. Two key events have created headwinds: the tragic Air India Flight 171 crash on June 12, 2025, and a sharp rise in crude oil prices amid escalating Middle East tensions. Maybank Research maintains a HOLD rating on SIA with a target price of SGD6.85, reflecting anticipated volatility but also a degree of downside cushion from the cum dividend of 30 cents (ex-date: August 8).

Air India Crash: Limited Financial Impact for SIA

– The fatal crash of Air India Flight 171 marked the first major Boeing 787 mishap since 2011. – SIA owns a 25.1% stake in Air India following the Vistara-Tata Sons merger in November 2024. – Despite the tragedy, SIA’s robust balance sheet and Air India’s status as a standalone entity mean limited direct financial risk for SIA. – Potential liabilities from the crash are expected to be covered by aviation insurance. – SIA is unlikely to ground its 787 fleet, thanks to its strong safety record and diversified operations.

Air India’s Turnaround Remains on Track

– Air India management’s transformation program is showing positive results, including reporting a core operating profit for FY25 on record revenues. – Key drivers: Lower fuel costs and higher passenger numbers. – Despite fierce competition, efficiency improvements and ongoing fleet upgrades have helped Air India move toward long-term profitability and self-sustainability.

Market Shifts: Jetstar Asia Exit a Boon for Scoot

– Jetstar Asia will cease operations by July 31, 2025, due to high operating costs and a restructuring by Qantas. – Jetstar Asia previously operated 180 weekly Changi Airport services, handling 2.3 million passengers in 2024 (3% of Changi’s total traffic). – The exit is expected to ease competition in the low-cost carrier segment, potentially boosting load factors and yields for Scoot, SIA’s budget arm. – Scoot plans to ramp up regional flights and launch new routes to Okinawa (Japan) and Labuan Bajo (Indonesia) — previously exclusive to Jetstar Asia.

SIA Share Price Performance and Forecasts

– Current Share Price: SGD7.03 – 12-Month Price Target: SGD6.85 (downside of 3%) – 52-Week High/Low: SGD7.18/SGD5.88 – Market Cap: SGD20.9B (USD16.4B) – Free Float: 31.1% – Major Shareholders: Temasek Holdings (53.4%), Vanguard Group (1.7%), BlackRock Fund Advisors (0.9%)

Price Performance Metrics

• 1-Month: +4% absolute, +3% relative to index
• 3-Month: +6% absolute, +3% relative to index
• 12-Month: +4% absolute, -12% relative to index

Comprehensive Financial Table: SIA Key Financials (SGD m)

Peer Comparison: Regional Airline Analysis

Peer Group Averages: P/E: 10.0x (Actual), 12.6x (FY+1), 10.9x (FY+2); EV/EBITDA: 7.6x; P/B: 3.9x; ROE: 4.1%

SIA Value Proposition and Strategic Initiatives

– SIA maintains industry leadership through product quality, service excellence, and global connectivity. – Focus on revenue diversification: Investments in digital, partnerships, and non-flying businesses. – First-mover advantage post-pandemic: Record financial performance as international travel rebounded. – Modern, fuel-efficient fleet positions SIA well for future growth.

Recent Corporate Milestones

1. September 2020: SIA cut 4,300 positions due to COVID-19 impact.
2. March 2022: Partnership with DHL to deploy five Boeing 777 freighters.
3. November 2022: SIA and Tata Sons agreed to merge Air India and Vistara (SIA gains 25.1% stake).
4. May 2023: SIA redeemed 50% of its mandatory convertible bonds (issued June 2021).
5. May 2024: Signed agreement with Neste to purchase 1,000 tonnes of sustainable aviation fuel.

Key Metrics, Risks, and Opportunities

Upside Factors:

• Higher-than-expected passenger loads or yields.
• Successful Air India-Vistara integration boosts SIA’s India market presence.

Downside Risks:

• Intensifying competition, especially in Asia-Pacific.
• Geopolitical or macro uncertainty dampening demand.
• Rising costs, especially jet fuel, could pressure margins.

ESG and Sustainability: SIA’s Commitment and Progress

– SIA scores 75/100 on Maybank’s ESG matrix, above the industry average. – Ambitious 2050 net zero carbon target. – 16.6% of waste diverted from landfill in 2024 (up from 13.1%). – 49.6% female workforce; 18% female board representation (target: 30%). – ESG targets incorporated into management scorecards; Scope 3 emissions tracked. – Ongoing investments in SAF, solar panels for SIA-owned buildings, rainwater harvesting. – No material environmental non-compliance events reported.

Financial and Operational Metrics at a Glance

• FY24A Revenue: SGD19.0B (7% YoY growth)
• FY24A Core Net Profit: SGD2.6B (20.6% YoY growth)
• FY25A Core Net Profit forecast: SGD1.7B (down 35.1% YoY)
• Net Gearing: 9.5% (FY24A) rising to 25.6% (FY25A forecast)
• Dividend Yield: 7.5% (FY24A), 5.9% (FY25A forecast)
• Capex/Revenue: 6.5% (FY24A), expected to rise above 15% by FY28E

Conclusion: Navigating Uncertainty with Resilience

SIA faces a challenging outlook as external shocks disrupt its share price momentum. However, solid fundamentals, a diversified fleet, a successful transformation at Air India, and a strong ESG framework position the airline for resilience. Investors should monitor near-term volatility but recognize SIA’s long-term strengths in network, brand, and sustainability leadership.

Historical Analyst Ratings and Contact Information

– Recent analyst ratings: HOLD maintained with minor target price adjustments throughout 2024-2025. – For further insights, Maybank Research’s regional offices and analysts are listed for investor queries.

For comprehensive coverage and the latest financial insights on Singapore Airlines and its peers, stay tuned to Maybank Research’s updates.