Singapore Airlines and its budget carrier subsidiary Scoot have raised airfares across their network as jet fuel prices continue climbing following tensions linked to the Iran conflict.
However, the airline group said it would not fully pass the rising fuel costs on to passengers, warning that excessive price increases could hurt travel demand and reduce competitiveness.
Speaking to reporters on May 15, SIA chief commercial officer Lee Lik Hsin explained that airfare pricing remains a delicate balancing act between operational costs and customer demand.
According to Lee, the company still needs to remain attractive to travellers despite mounting cost pressures.
He reportedly said the airline had to continue offering value to customers while remaining competitive in the increasingly challenging aviation market.
Fuel Prices More Than Doubled Since Conflict Began
In its latest financial results for the year ending March 31, the SIA Group revealed that jet fuel prices had more than doubled since the outbreak of the Iran conflict.
The group described fuel expenses as its single largest operating cost.
Despite already implementing fare increases across both SIA and Scoot routes, the company acknowledged that the higher ticket prices still do not fully offset the sharp increase in fuel expenditure.
Lee reportedly said SIA intentionally avoided pushing fares to levels that would entirely recover fuel costs because doing so could drive passengers away.
He added that consumers would likely reject steep airfare hikes if airlines attempted to transfer the full burden directly to travellers.
The development comes as global airlines continue facing uncertainty caused by geopolitical instability, fluctuating oil prices, and changing passenger demand patterns.
SIA Expanding Europe Routes While Rivals Cut Flights
Even with rising operating costs, SIA said it is continuing to expand its European network while some competing airlines reduce services.
The airline group reportedly plans to increase European capacity by around 13 per cent, partly to capture demand from passengers avoiding Middle Eastern transit routes affected by regional tensions.
SIA chief executive officer Goh Choon Phong said the company moved quickly to respond to disruptions by adding flights where possible.
Additional services to London and Frankfurt were reportedly introduced after several airlines suspended certain Asia-Europe operations.
The carrier is also preparing to launch flights to Madrid and introduce a three-times-weekly Munich service in October.
At the same time, SIA will increase flights to Britain through expanded London Gatwick operations alongside existing London Heathrow services.
This will reportedly bring the airline’s total London operations to as many as six daily flights.
Airline Says Financial Position Remains Strong
Lee reportedly stated that SIA’s strong financial position has allowed the airline group to continue expanding despite the difficult operating environment.
Instead of reducing flights or cutting routes, the company believes it is in a position to grow its network while competitors scale back.
SIA chief operations officer Tan Kai Ping also said the airline expects to continue attracting travellers seeking alternative transit routes outside the Middle East region.
He added that some passengers have already adjusted their travel plans to avoid affected transit hubs.
Addressing concerns over potential fuel shortages, Tan said jet fuel supplies remain stable throughout SIA’s network.
According to him, no airport currently served by SIA has implemented fuel rationing measures despite ongoing geopolitical uncertainty.
The rising airfares are expected to affect both leisure and business travellers from Singapore, especially during the busy mid-year holiday season, as airlines worldwide continue grappling with higher operational costs and volatile fuel markets.