SIA Holds the Line on SAF as Middle East Fuel Shock Bites

Singapore Airlines Group has reaffirmed its commitment to sustainable aviation fuel even as a fuel cost shock, driven by the Middle East conflict, pushes jet fuel prices well above year-ago levels. An SIA spokesperson told S&P Global Platts the group continues to engage different SAF suppliers while exploring diverse sourcing models for a resilient long-term supply chain. The reaffirmation comes weeks after CAAS deferred the SAF Levy's start date in response to the same cost pressures.

Two Tracks, Different Speeds

The levy deferral changed the mandatory funding mechanism's timeline. It did not touch a separate, voluntary SAF procurement trial involving SIA, its low-cost unit Scoot, Changi Airport Group, and several financial institutions, which CAAS confirmed is proceeding as planned. That distinction matters: Singapore's SAF ecosystem is not running on a single track tied to the levy's fortunes, but on parallel mandatory and voluntary mechanisms that can move at different speeds under pressure.

Hedging Cushions the Shock

SIA has hedged roughly 47% of its expected fuel requirements for the fourth quarter of FY2025-26 and 41% for the first quarter of FY2026-27, which has partly cushioned the airline from the worst of the price volatility. Notably, SIA has not reintroduced a fuel surcharge, instead adjusting fares directly across the network, a choice that only partially offsets the higher cost base.

Why the Trial Is the Story to Watch

A mandatory levy generates guaranteed volume once it takes effect. A voluntary trial, run by choice and continuing through a genuine cost shock, is a stronger signal of underlying commercial intent. If SIA, Scoot, Changi Airport Group and their financial partners keep the voluntary trial moving through a period when deferring the mandatory levy was the easier political call, that says more about the durability of Singapore's SAF demand than the levy timeline itself.

Source: S&P Global Platts, 28 April 2026.