Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: UOB KayHian
UOB KayHian, which maintains its Buy call with a $16.00 target price, says the data show the strongest passenger traffic growth in six months: “This comes as a surprise as traffic typically slows after December, which generally registers the strongest growth.”
It notes, SIA added flights to Manchester, Houston, Osaka and Seoul during the period, hence passenger load factor was 1 percentage point lower. “Still, the stronger traffic growth allows scope for significant margin improvement if costs, particularly fuel costs are well-managed.”
Company Name: SINGAPORE AIRLINES LTD
Research House: UOB KayHian
Singapore Airlines (C6L.SG) is off 1.3% at $14.26, snapping its 3-session winning streak despite posting a 2.9% on-year growth in passenger carriage for January with the number of passengers carried in the month +3.2% on year to 1.44 million.
UOB KayHian, which maintains its Buy call with a $16.00 target price, says the data show the strongest passenger traffic growth in six months: “This comes as a surprise as traffic typically slows after December, which generally registers the strongest growth.”
It notes, SIA added flights to Manchester, Houston, Osaka and Seoul during the period, hence passenger load factor was 1 percentage point lower. “Still, the stronger traffic growth allows scope for significant margin improvement if costs, particularly fuel costs are well-managed.”
It adds, the numbers are a good start for FY11; “if this trend is maintained into the rest of the quarter, SIA should see 4Q earnings upgrades. The increase in passenger carriage is also significant in that it will allow SIA to defray a greater portion of the fuel price increases and will allow for higher pricing power.”
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