- We expect the strong momentum in Singapore’s and Asia’s air passenger traffic to continue as air travel spending in the region normalize. However, we anticipate diverging earnings between Singapore Airlines (SIA, SGX:C6L) and other aviation companies.
Excluding SIA, the aviation sector is well positioned to deliver sustained earnings growth over the next two years.
- - Read this at SGinvestors.io -
- In contrast, other aviation companies are expected to see strengthening pricing power and improved cost control. Buoyant MRO demand, supported by higher aircraft utilisation, the prolonged use of older aircraft, and engine issues, bodes well for ST Engineering and SIA Engineering.
- - Read this at SGinvestors.io -
- Meanwhile, SATS’s cargo segment will benefit from growth in global cargo volumes, while its ground handling and aviation catering businesses are set to grow in tandem with the increase in global/regional air traffic and the further recovery in long-haul travel.
Despite having outshone the broader market, we anticipate further upside for SG aviation names.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Jason SUM CFA DBS Group Research | Tabitha FOO DBS Research | Paul YONG CFA DBS Research | https://www.dbs.com/insightsdirect/ 2024-04-02
