SIA

SIA: Announced that it is leasing an additional 15 A330-300 aircraft from Airbus, which will be powered by Rolls-Royce Trent 700 engines. Fleet will join 19 A330-300s already in service and will be delivered btwn 2013 and 2015, which will operate on routes within Asia, Aus and Middle East……

With these new aircraft on lease rather than purchased, SIA continues to have a optimum mix between leased and owned aircraft for capital mgt, despite still having more than $5b in cash even after upcoming $1.20 special div (book closure 4 Aug), which opens possibility of more generous dividends in coming yrs….

We note that while order reinforces confidence on its long-term prospects, SIA may be in for a bumpy ride in the short term due to higher fuel costs and moderating yields. We note that street has a mix of Buy and Hold Calls on counter with a mean Tp of $14.91.