SINGAPORE AIRLINES LTD
C6L.SI
Singapore Airlines: To re-launch direct flights between Singapore and U.S.
- Singapore Airlines (SIA) announced last evening that it has signed an agreement to be the launch customer for a new ultra-long-range variant of the Airbus A350 aircraft (i.e. A35-900ULR). This agreement will lift SIA’s total number of firm order for A350s to 67, of which seven will be upgraded to the A350-900ULR, plus 16 purchase options.
- The first A350-900 is expected to be delivered in early-2016 while the first A350- 900ULR is scheduled for delivery in 2018. The delivery of A350-900ULR in 2018 will enable SIA, in a commercially viable manner, to re-launch the world’s longest non-stop flights, between Singapore and both Los Angeles and New York.
- Non-stop flights between Singapore and additional points in the U.S. are also under consideration.
- In our view, this is certainly positive for SIA in the longer-term to regain market share of passenger traffic between Singapore and U.S., which was lost when SIA stopped such direct services since 2013. However, in the near to medium-term, we believe Gulf carriers continue to be a significant threat with aggressive expansion plans and we see pressures ahead on both yields and loads. Hence, we keep our forecasts unchanged for now.
- Maintain HOLD rating on SIA with FV of S$11.27.
Eugene Chua
OCBC Securities
|
http://www.ocbcresearch.com/
2015-10-14
OCBC Securities
SGX Stock
Analyst Report
11.27
Same
11.27
