SIA

SIA: SIA and Tata Sons have signed a Memorandum of Understanding applied for Foreign Investment Promotion Board approval to establish a new full service airline in India, based in New Delhi. Tata Sons will own 51% and SIA will own 49%. CAPA, an aviation consultant estimates India’s domestic market to almost triple by 2021, establishing an airline in the country presents a major growth opportunity for the SIA group Deutsche (Sell, TP: $8.80) thinks this is a brave move to try and offset the intense competition out of their Singapore hub. If approved, the house would like to see JV ramp up quickly to reach economies of scale. MBKE analyst expects neutral to mildly positive reaction for SIA’s stock to the news.