Singapore Airlines - Phillip Securities 2024-02-22: Costs Escalate, Yields Under Pressure

Singapore Airlines - Costs Escalate, Yields Under Pressure

SIA (SGX:C6L) | SGinvestors.ioSIA (SGX:C6L)
  • Singapore Airlines (SIA)'s 3QFY24 operating profit fell 19.3% y-o-y to S$609mil, as yield decline and inflationary cost pressure (+9.3%) offset strong passenger traffic (+19.1%) and cargo load (+3.9%).
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  • SIA's 9MFY24 net profit of S$2.1bn is above our FY24e forecast. We raise our FY24e net profit forecast for SIA by 10.5%, as passenger load factors are coming in above our earlier assumptions. However, 4QFY24e earnings is expected to fall y-o-y and q-o-q with mounting pressure on yields and costs.

The Negatives

Revenue grew slower than volume.

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  • Both pax yields (9.9 cents) and cargo yield (40.3 cents) are 20% and 32% above pre-pandemic level, respectively, held up by still high load factors.
  • If pax load factor decline in subsequent quarters, pax yield, as measured by revenue per available seat-km (RASK) could likely fall at a faster rate.

Cost escalated.

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Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @

Peggy Mak Phillip Securities Research | 2024-02-22

Previous report by Phillip:
2023-11-09 Singapore Airlines - Declining Yields; Maintain REDUCE.

Price targets by 4 other brokers at SIA Target Prices.

Listing of research reports at SIA Analyst Reports.

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