SIA

SIA: former cargo chief, Goh Choon Phong to succeed outgoing CEO Chew Choon Seng, wef 1 Jan 2011. News comes as surprise to some mkt watchers, given Goh’s relatively low profile to those outside the company. However, internally, he is well known as a “brilliant strategist and a leader with hands-on experience in virtually every major division” within SIA…

Separately, SIA fares are expected to go up from 1 Oct 2010. An Economy class seat could cost S$200 more, while premium seats could cost up to S$1000 more. This should be supported by strong air travel demand, as traffic has been picking up both ways, with more residents going for holidays, and more visitors are arriving, eager to see Singapore’s new slew of attractions such as the two iconic integrated resorts…

On the back of rising load factors in recent months, SIA should be able to raise fares successfully. Competition is also expected to follow suit in raising fares to pre-recession levels. While negative for consumers, move is positive for SIA, as this should pave the way for higher yields going forward. Majority of Street rates as Buy; most recent update from DBSV gives $18.62 target.