SIA

SIA: Pricing pressures continue for the national carrier. In spite of new incentives rolled out by the Changi Airport Group (CAG) and new codeshare alliances with other carriers, SIA continues to be dogged by regional overcapacity and stiff competition from Middle Eastern carriers. OCBC believes SIA is set to benefit from CAG’s expanded incentive programme that includes 50% rebate on landing fees for all non-stop long-haul passenger flights from Sep'14 to Mar'16. House expects the overcapacity issue in the region and competition from Middle Eastern airlines will continue to cause pricing pressure and thus, supressing the yields of SIA, at least for the next few quarters. OCBC maintains its HOLD rating but raised TP to $10.05 (from $9.97).