Singapore Airlines May End Its Recent Rally Despite Robust Demand in May
By Ying Xian Wong
Singapore Airlines retreated from a 12-day rally in early trading Friday despite the release of May operating statistics which underscored strong demand for air travel.
Shares of Singapore's flag-carrier were up as much as 1.8% in early trading but reversed course to a drop of 0.6% by mid-morning at 7.86 Singapore dollars (US$5.88), bucking a rise in the city-state's benchmark equities index.
The stock's gain this month now stands at 23% and it is 43% higher from the beginning of the year.
Singapore Airlines late Thursday said its group passenger capacity in May rose 34% on year, while passengers carried rose 66% to 2.8 million. Group passenger load factor for the month was up 9.8 percentage points to 88.0%.
Cargo load factor, however, fell 12.2 percentage points on year to 53.2% amid weaker demand, it said.
OCBC Investment Research analyst Ada Lim recently raised her fair-value estimate of SIA's shares to S$7.94 from S$7.18, saying near-term travel demand may remain more robust than expected and while ticket prices stay elevated. The analyst cautioned, however, that SIA will likely face rising competition as regional airlines return more international capacity to the market.
OCBC has a hold rating on the stock.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
June 15, 2023 22:56 ET (02:56 GMT)
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