SINGAPORE AIRLINES LTD
C6L.SI
Singapore Airlines - Travel warnings to Singapore due to Zika
- Changi Airport saw increased activity in Jul 16 but as confirmed cases of Zika virus in Singapore rose to 115 yesterday, it raises the question of whether such air travel activity growth can be sustained for the rest of the year.
- While Zika virus is generally a mild disease (except for pregnant women), it could still be infectious even if people who become infected do not show any symptoms. As a result, U.S. and South Korea have joined Australia and U.K. amongst other countries to issue travel warnings on Singapore.
- Malaysia and Indonesia have also stepped up protective measures at airports and border checkpoints. However, Singapore Tourism Board said it was premature to consider any impact on the tourism sector.
- In our view, if Zika virus continues to pose problems in Singapore over a prolonged period, inbound and outbound traffic will likely be hit.
- With Singapore Airlines (SIA) using Singapore as its main hub, we believe its business will also be impacted by the resulting lower passenger traffic.
- Nonetheless, we believe it is still too early to determine any impact and hence, maintain HOLD on SIA with an unchanged S$11.56 FV for now.
Eugene Chua
OCBC Investment
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http://www.ocbcresearch.com/
2016-09-01
OCBC Investment
SGX Stock
Analyst Report
11.560
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11.560
