SIA slips nearly 2% as aviation industry endures turbulent week

Jetstar Asia's announced exit, Air India crash and Israel-Iran conflict rock sector

- Kang Wan Chern

Singapore Airlines (SIA) fell nearly 2 per cent last week, closing at $6.94 on June 13, amid a turbulent week for the aviation sector.

On June 11, Australian carrier Qantas announced it would shut down its Singapore-based budget airline, Jetstar Asia, citing rising supplier costs, airport fees and regional competition.

The group, which reported a $2.8 billion profit for the 2025 financial year, had earlier announced bonuses equivalent to 7.45 months for SIA staff and 4.76 months for Scoot staff.

SIA is also considering increasing flight frequencies to key Jetstar Asia destinations such as Okinawa in Japan and Labuan Bajo in Indonesia.

Jetstar Asia currently operates 16 routes and 180 weekly flights out of Changi Airport, having carried about 2.3 million passengers in 2024, or around 3 per cent of the airport's total traffic. Its closure will affect about 500 employees.

The following day, on June 12, the aviation industry was further shaken by the crash of Air India Flight AI171. The aircraft, en route to London from Ahmedabad, India, crashed minutes after take-off, killing 241 people on board, leaving a sole survivor.

SIA holds a 25.1 per cent stake in Air India, following a merger between the Indian flagship carrier and Indian airline Vistara in November 2024. Before the merger, Vistara was jointly owned by Tata Sons and SIA.

When Israel launched air strikes on Iran, targeting nuclear and military sites and killing senior commanders, Tehran responded with retaliatory attacks.

The escalation spurred a sharp jump in oil markets, with Brent crude futures surging as much as 13 per cent—the largest intraday move since March 2022—to US$78.50 a barrel before partially retreating.

Volatile oil prices have a direct impact on airlines, as jet fuel is one of their largest operating expenses. SIA uses a fuel hedging policy to manage the volatility of oil prices, its largest operational cost.