Higher costs weigh on SIA, but record earnings still expected: analyst

UOB Kay Hian has cut earnings forecasts by 3.6% for 2024.

Higher cost pressures will hit Singapore Airlines’ (SIA) earnings in 2024 and 2025, according to UOB Kay Hian.

The brokerage firm cut its FY2024 and FY2025 earnings forecasts for the airlines by 3.6% and 3%, respectively, in anticipation of higher non-fule operating costs. SIA is now expected to earn S$3.69b and S$1.58b in FY2024 and FY2025.

The FY2024 net profit estimate accounts for a S$1.1b gain from the Air India Vistara merger.

UOB Kay Hian still expects SIA to report record-level of earnings for the full year of FY2024. SIA is further expected to be able to sustain a 28 cents final dividend, UOB Kay Hian analyst Roy Chen said in a report.

This would lead to FY24 total dividend per share of at least 38 cents, or over 6% yield, he added.

SIA reported a net profit of S$659m in Q3 FY2024, which is lower than UOB Kay Hian’s guided range of S$670m to S$810m. This is despite SIA getting a boost from one-offs such as tax credit and disposal gains.

“The miss was mainly attributable to higher-than-expected costs, as well as slightly weaker-than-expected cargo yields. Forward ticket booking is healthy but yields for both pax and cargo operations could be under pressure,” Chen said.

Key risks include a weaker-than-expected macroeconomic environment dampening air travel and air cargo demand; competition rising faster than expected; and unfavourable fluctuation of jet fuel prices.

Follow the link for more news on

Singapore Airlines

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia