SIA

SIA: Business Times report that SIA may launch more flights to the US if its non-stop services are successful.

Currently, SIA has an order for seven Airbus A350-ULR planes, slated for delivery in 2018. If such non-stop services are successful, SIA may purchase more aircraft.

SIA scrapped its non-stop flight to the US in 2013 as it was loss-making. The routes were previously flown using the A340-500, which were fuel-guzzlers. Compounding this was a double whammy of expensive fuel amid weak demand post-GFC.

The incoming planes are more fuel efficient, and would remain profitable even if fuel prices climb significantly from current levels

SIA’s proposition for these routes is to clawback lost market share when it scrapped non-stop flights to the US.

SIA is currently trading near 1x P/B.

The street has 7 Buys, 9 Holds, and 2 Sells on SIA with a mean TP of $11.92