$SIA(C6L.SG)reported a S$76 million net loss for the quarter ended 30 June 2026, compared with a S$186 million profit a year earlier. This was the first quarterly loss since the COVID period.The surprising part is that revenue was actually very strong at S$5.71 billion, +19.3% YoY.So the problem was not a lack of demand.Net fuel costs jumped 78.5% to S$2.25 billion, largely because of the surge in jet-fuel prices following the Middle East conflict.

As a result, operating profit plunged 73.8% to S$106 million, despite record revenue.

This is probably the most important issue for investors right now: SIA is generating strong revenue, but higher fuel costs are absorbing a large portion of the additional revenue.SIA's 25.1% stake in Air India remains another concern.

The airline recorded a S$42 million larger share of losses from Air India in the latest quarter. There are also growing concerns that Air India may require additional capital as it goes through its turnaround.

This has become an increasingly important part of the SIA investment story because shareholders are now looking not only at SIA's airline operations, but also at the amount of capital and earnings drag coming from Air India.For a long-term investor, I'd therefore view the current situation as higher risk but potentially interesting if fuel prices normalise. The key question is whether the current fuel-cost shock is temporary or becomes a prolonged drag on earnings.