SIA

SIA: positive read across from industry data. Int’l pax demand grew 10.1% yoy in Oct, while int’l freight demand was up 14.4%. Pax demand now 5% above pre-crisis levels of early 2008, while freight is 1% above. IATA notes growth returning to a more normal pattern as 2010 comes to a close. Says recovery seems to be strengthening despite uncertainties in the global economies…

Improvements in demand are being met by a cautious approach to capacity expansion, which has increased at a slower pace. Discipline within the industry bodes well for yield trends going forward…

Separately, SIA has a new reciprocal code share with Garuda for all S'pore- Denpasar, Bali flights, to commence Dec 1. SIA currently operates three flights a day on the route, while Garuda has one. This follows yday’s announcement of a code-share deal with Scandinavian Airlines, and would help boost flight frequencies.
Stock trades at 14x P/E, 1.3x P/B. The majority of Street rates as Buy with targets ranging $16.34-20.50.