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Friday, August 8, 2014

Will SIA follow in MAS's footstep?...don't be too cocksure it won't.

MAS and SIA were offshoots of the defunct MSA. Both went separate ways in Oct 1972. After 44 years in operation, MAS is in a bad state,financially speaking. Today MAS shares are being suspended pending an announcement.

What about the other half of MSA, which is SIA? Still going strong? Not so according to analysts. SIA share is being hammered downwards over the last 2 years. It reached a low of S$9.80 yesterday. Four years ago, it topped $18.

The airline business is a sunset business. Fuel prices are soaring and there are cut throat competition from budget carriers. I can't imagine flying to London from S'pore and back at $1,388 (all inclusive) on Singapore Airlines (min 2 paxs) . It used to be about $1,800 per passenger not including the taxes etc. Crazy isn't it? How long more can SIA keep selling cheap fares?

Two years ago, I read an article in which an analyst predicted that SIA share price will fall to as low as $8. I did not believe him then because the share price was around $13.50. Today, I fear that his prediction may be coming true.

Last update as at 3:30pm:

The Malaysian government is taking MAS private and will be delisted from the stock exchange.

Read more

SIA will fly the Airbus A380 to NZ for the first time.

The New Zealand Minister of Transport today approved the proposed alliance of Singapore Airlines and Air New Zealand. 
The alliance, which was first revealed on January 16, will lead to increased flight frequency between Singapore and New Zealand and provide other consumer benefits, such as improved connections through reciprocal codeshare ties.
The clearance represents the New Zealand regulatory approval needed for Singapore Airlines and Air New Zealand to proceed with the alliance, as the Competition Commission of Singapore had earlier given its approval.

As part of the alliance, Air New Zealand will fly the Auckland-Singapore route again and Singapore Airlines will operate the world’s largest aircraft, the Airbus A380, to New Zealand for the first time.

Source: Singapore Business Review – Thu, Aug 7, 2014


Anonymous said...

LKY said long ago if SQ not profitable the Singapore government will closed it down.

Anonymous said...

Dear Mr BT,

The "two-to-go" deal to London costs $1,388 per pax (min 2 pax), not for 2 pax total

Boh Tong aka Luke Tan said...

Ok thanks, your point is noted and I've amended my post.

Anonymous said...

Hi bt,

which airlines are the winner among all? budget airlines?
They got more passengers and earn more?

Boh Tong aka Luke Tan said...

Delta, the world's second-largest airline in terms of passengers carried, generated net profits last year of nearly US$2.7 billion — the highest in airline industry history.

Budget airline Ryanair reported a record net profit of EUR569 million or S$955 for FY2013