Highlights

• 1QFY27 reported net loss of S$76m came in within our guided range; however, excluding a sizeable one-off accounting gain for Air India, SIA’s core earnings would have missed our expectations.
   

• We expect SIA’s earnings to rebound to S$240m-460m in 2QFY27, driven by more effective fuel cost pass-throughs.
   

• We cut our FY27-29 earnings forecasts for SIA by 11-13% as we finetune our cost projections to reflect recent rebound in jet fuel prices.
   

• Maintain HOLD with a lower target price of S$6.71.
   

Analysis

• Reported earnings broadly in line, but core earnings a miss. Singapore Airlines’ (SIA) 1QFY27 headline net loss of S$76m stood within our guided
  earnings range of S$90m loss to S$110m profit, at the lower end. However, we understood that the reported net loss contribution from Air India this quarter included a sizeable one-time accounting gain (probably in the scale of S$150m by our guesstimate), excluding which SIA’s 1QFY27 earnings would have missed our projections.
   

• Revenue rose 19.3% yoy, partly driven by fuel cost pass-throughs, and was in line with our projection (we were projecting 18-20%). However, looking at the revenue mix:
  
   - Pax revenue was slightly stronger than our projection, due to a 12.7% pax yoy yield growth, better than our projected 9-11% yoy growth.