Runway Widens for SIA With Exit of Jetstar Asia Amid Aviation Turbulence

Potential for Better Yields, Profitability Despite Clouding of Operational Outlook

- Sue-Ann Tan

Escalating tensions between Israel and Iran and the tragic crash of Air India Flight AI171 have roiled the global aviation industry and clouded the operational outlook for many airlines, including major carriers like Singapore Airlines (SIA).

Yet there could be a silver lining for the national airline amid the turbulence, following the closure of Singapore-based budget carrier Jetstar Asia.

On June 12, an Air India plane bound for London crashed outside the perimeter of India's Ahmedabad airport, resulting in at least 271 casualties.

The crash could have an impact on SIA, as it holds a 25.1 per cent stake in Air India, following the carrier's merger with Vistara, another Indian airline, in November 2024. Before the merger, Vistara was jointly owned by Tata Sons and SIA.

A day later, on June 13, geopolitical tensions rose sharply when Israel launched air strikes on Iran, with Iran subsequently retaliating.

The attacks, which continued over the weekend, sent oil prices surging as much as 7 per cent on June 13 before partially retreating.

Volatile oil prices could have a direct impact on airlines, including SIA, as jet fuel, derived from oil, is its largest operating expense.