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SIA Q1 Loss US$213m, To Give Away Sats For Free  
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Posted (5 years 1 month 2 weeks 5 days 8 hours ago) and read 11880 times:

http://info.sgx.com/webcoranncatth.n...ewsRelease1QFY0910.pdf?openelement

SIA announced an enormous S$307 million (US$213 million) loss for the quarter ending 31 March, compared to analyst expectations of a loss of S$30 million (Analysts = BIG FAIL)

In a bid to protect their share price from plunging in response to the previous quarter's near loss, SIA announced in May that they will be distributing their 81% shareholding in ground handling subsidiary SATS - to all their shareholders at a ratio of 0.73 shares for ever 1 SIA shares held. That is largely because they didn't want to burn through cash to give a dividend, and settled on giving away their subsidiary instead.

You can see from the statements below that SATS was the best performing unit of the SIA Group, yet they are stupidly giving it away for free on 13 August this year so that the effective dividend yield of their share price stays at 13%.

I can't help but feel that this company is being run to the ground by its current incompetent management who will stop at nothing to prevent the share price from plunging.

In the meantime, analysts from JP Morgan to DBS Bank have been cheerleading SIA shares this and last week, raising their target price to $16+ from the current $13.50. Do these analysts bother to do load factor and yield analysis? SIA's fares are widely available and we all read about their 284 pound fare from LHR to AND OLD: Hong Kong - Kai Tak International (HKG / VHHH) (closed), China - Hong Kong">HKG. In addition, they release load factor statistics on a monthly basis - which were consistently under 70% for the past 3 months.

==========================================



S$307 MILLION LOSS IN FIRST QUARTER
GROUP FINANCIAL PERFORMANCE

First Quarter 2009-10
The combination of the global economic downturn, the outbreak of
Influenza A (H1N1) and fuel hedging resulted in a loss of $307 million for the first
quarter ended June 2009. This is the first quarterly loss since the SARS crisis in 2003.
Group revenue fell 30% from April – June 2008, down by $1,260
million, as carriage and both passenger and cargo yields declined, the former
reflecting increased competition and promotional fare activities.
Group expenditure at $3,191 million was $598 million (-15.8%) lower
than the same quarter in the preceding financial year. The drop in the price of jet
fuel provided relief of $1,140 million, partially offset by fuel hedging losses of $287
million (compared to hedging gains of $349 million last year).
The Group recorded an operating loss of $319 million for the first
quarter, against an operating profit of $343 million last year.

The operating results of the main companies in the Group are as
follows:
• Singapore Airlines Loss of $ 271 million (profit of $265 million previously)
• SATS Group Profit of $ 44 million (+14.4%)
SIA Engineering Profit of $ 12 million (-25.0%)
• SilkAir Loss of $ 3 million (profit of $10 million previously)
SIA Cargo Loss of $ 104 million (profit of $5 million previously)

STEPS TO REDUCE COST
Several steps have been taken by the Company to contain costs,
including a freeze on hiring, unpaid leave, wage cuts and deferment of non-essential
projects.
Consequent to the first quarter results, the monthly variable component
of employees’ salaries will be cut in accordance with the Collective Agreements
signed with the respective unions.
Together, these measures to trim staff costs will provide estimated
savings of $60 million for the current financial year.
In addition, the Company is continuing its efforts to eliminate wastage
and duplication and to negotiate with vendors to reduce rates.

FLEET AND ROUTE DEVELOPMENT
During the quarter, Singapore Airlines took delivery of two Airbus
A380-800s and four Airbus A330-300s, and decommissioned three Boeing B747-
400s. As at 30 June 2009, the operating fleet comprised 107 passenger aircraft –
nine B747-400s, 77 B777s, eight A380-800s, eight A330-300s and five A340-500s –
with an average age of 5 years and 11 months.
The Company adjusted capacity to match demand. Services to
Vancouver via Seoul were suspended from April 2009, while three-times-weekly
flights to Moscow via Dubai were withdrawn from July 2009. From August 2009,
services to Tokyo via Bangkok will be discontinued. Frequencies to Manchester,
Rome, Zurich, Beijing, Guangzhou, Fukuoka, Colombo, Dhaka, Male, Mumbai and
New Delhi were reduced during the quarter. Conversely, a fourth daily frequency
was recently added to Manila and the larger A380-800 is now being deployed to
Hong Kong.

OUTLOOK
The price of jet fuel is at less than half what it peaked at last year, but
remains volatile. However, losses from hedges, which were contracted when fuel
prices were at historical highs, are expected but will taper off over the course of the
financial year as these hedges are settled.
Air cargo carriage has stabilized in the last few months, and industry
indicators have shown some improvement. Still, the outlook for air cargo remains
challenging, with yields expected to remain under pressure from excess capacity in
the market.

The Group’s first quarter performance reflected the adverse business
conditions for airlines. If these conditions continue, the Group expects to make a loss
for the full year. Revenues from the airline operations exceeded cash expenditure,
although not enough to cover depreciation charges. Net operating cash flow is
expected to remain positive for the rest of the financial year. The Group’s cash
balance remains strong and the Company does not foresee any necessity to raise
capital.
* *

34 replies: All unread, showing first 25:
 
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 1, posted (5 years 1 month 2 weeks 5 days 8 hours ago) and read 11864 times:

I will repost something that I wrote in May this year from another thread:

Is Temasek Holdings Plundering Singapore Airlines? (by Docpepz May 14 2009 in Civil Aviation)

Some of us may have read the news yesterday that SIA's 4th quarter profit plunged 92%. Instead of the usual S$1 dividend that SIA has given for the past few years, SIA is offering a full year dividend of 40 cents, PLUS 0.73 SATS share for every SIA share that shareholders have.

Singapore Airport Terminal Services (SATS) is the ground handling and catering subsidiary of SIA, and is 80% held by SIA, with the remaining floated on the Singapore Exchange.

So what SIA is doing is distributing their existing stake in SATS (80%) to the existing shareholders of SIA, of which Temasek Holdings holds 55%, in lieu of a larger dividend. As such, the dividend yield for SIA this year is 13%, taking the 40c + SATS shares, making it one of the highest on the Singapore market.

For some background, on 10 Jan this year, SATS acquired Temasek Holdings' 70% stake in Singapore Food Industries (SFI) for S$500 million. It was seen as a good fit for SATS to expand out of the airport catering/ground handling business into more non-cyclical businesses. Singapore Food Industries supplies food to major UK supermarket chains, as well as Singapore supermarket chains and most importantly, the Singapore military.

Analysts though, did question whether the deal would have gone ahead if SATS wasn't a subsidiary of a Temasek company, and SFI also wasn't a Temasek subsidiary. Looking at the economic climate of Dec to Jan last year, analysts said it was very unlikely that M&A work would have gone on if SATS and SFI weren't indirectly related to each other. However, Temasek came out as the winner, with S$500 million booked in as revenue.

Fastfoward to now, and SATS and SFI are one company. SIA now announces that they will distrubte SATS shares to existing shareholders. Of course, Temasek is the largest shareholder - which means Temasek gets 55% of 80% which is 44% of SATS - becoming the single largest shareholder. So what has happened is Temasek "divested" off SFI for $500 million, and have now become the direct single largest shareholder in SATS - For free!

SIA has gained absolutely *nothing* from this SATS "divestment" - they just redistributed this subsidiary as a dividend. Temasek holdings divested of SFI and gets it back for free through SATS - which means that Temasek Holdings can, at its own time and bidding, sell SATS off at a much higher price when the market recovers.

I am no conspiracy theorist but it seems that:

1) SATS minority shareholders have been screwed because they overpaid for SFI
2) SATS loses SIA as its parent company
3) SIA gains nothing from this "divestment" of SATS
4) SIA can no longer book SATS revenue as consolidated group revenue

Temasek is the winner because:

1) They get $500 million from divesting off 70% of SFI to SATS, but get it back for nothing through SIA "divesting" 44% of SATS to them
2) Because of the seemingly high dividend yield (SATS shares + 40c) the SIA shareprice doesn't plunge in response to horrific 4th quarter earnings. In fact SIA is up 2% on the Singapore exchange today.
3) At a later date, Temasek can divest its stake in SATS at a much higher price.

Should minority shareholders in SIA and SATS be concerned about this development?


User currently offlineSomeone83 From Norway, joined Sep 2006, 3386 posts, RR: 3
Reply 2, posted (5 years 1 month 2 weeks 5 days 8 hours ago) and read 11783 times:



Quoting Docpepz (Thread starter):
You can see from the statements below that SATS was the best performing unit of the SIA Group, yet they are stupidly giving it away for free on 13 August this year so that the effective dividend yield of their share price stays at 13%.

They're not "giving it away". For the shareholders it is status quo. The only difference is that they will have shares in two companies instead of one, but the total value should be the same


User currently offlineAvek00 From United States of America, joined Oct 2004, 4382 posts, RR: 19
Reply 3, posted (5 years 1 month 2 weeks 5 days 8 hours ago) and read 11679 times:

NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!

Please don't shatter the "conventional wisdom" of so many a.nutters that SQ is superior in every way to everyone else, especially USA legacy carriers -- it could lead to all sorts of irrational thoughts and rash behaviors.



Live life to the fullest.
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 4, posted (5 years 1 month 2 weeks 5 days 7 hours ago) and read 11592 times:



Quoting Someone83 (Reply 2):
They're not "giving it away". For the shareholders it is status quo. The only difference is that they will have shares in two companies instead of one, but the total value should be the same

What about SIA as a company after they distribute away SATS? If they continue to make losses, what are they going to distribute next year to ensure that the dividend yield remains in tact? SIA Engineering Company? Break their planes up and distribute the metal?


User currently offlineOlympic472 From United States of America, joined Jun 2008, 456 posts, RR: 0
Reply 5, posted (5 years 1 month 2 weeks 5 days 4 hours ago) and read 10857 times:

docpepz: Unless there is a statement from Temasik to the contrary, I think your analysis is reasonable. This is a shell game with Temasik holding the winning hand.
Yes, SQ has more giveaways in its bag. An airline without much left to giveaway is Air Canada.

Quoting Avek00 (Reply 3):
Please don't shatter the "conventional wisdom" of so many a.nutters that SQ is superior in every way to everyone else, especially USA legacy carriers -- it could lead to all sorts of irrational thoughts and rash behaviors.

It is rather quiet here from the SQ camp.  yawn 



Civil Aviation has a "Need for Speed"!
User currently offlineLAXintl From United States of America, joined May 2000, 25353 posts, RR: 49
Reply 6, posted (5 years 1 month 2 weeks 5 days 3 hours ago) and read 10803 times:



Quoting Docpepz (Reply 4):
What about SIA as a company after they distribute away SATS?

They are a transportation company.

SQ is going back to its primary focus, and removing a non-core unit.



From the desert to the sea, to all of Southern California
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 7, posted (5 years 1 month 2 weeks 5 days 3 hours ago) and read 10694 times:



Quoting LAXintl (Reply 6):
They are a transportation company.

SQ is going back to its primary focus, and removing a non-core unit.

Which major airline does not control its own ground handling unit in its home base? BA, QF, AF/KL, MH, TG, CX all have their own ground handling units in their hubs.

While SATS may be a separate entity from SIA, they do plenty of things for SIA without charge. Having 80% of the ground handling market share in SIN (and groundhandling prices in SIN are not regulated), the other ground handler, the Emirates-controlled CIAS, will be completely unable to service the large number of SIA flights in SIN.

Even though SIA and SATS signed a 5 year ground handling agreement 2 months ago, what's there to stop SATS from doubling its prices in 2014?


User currently offlineAirbazar From United States of America, joined Sep 2003, 8363 posts, RR: 10
Reply 8, posted (5 years 1 month 2 weeks 5 days 3 hours ago) and read 10646 times:



Quoting Avek00 (Reply 3):
Please don't shatter the "conventional wisdom" of so many a.nutters that SQ is superior in every way to everyone else, especially USA legacy carriers -- it could lead to all sorts of irrational thoughts and rash behaviors.

Are you implying that SQ is not supperior to the US legacy carriers? Or are you implying that SQ is somehow immune to the current economic downturn?
So they'll report a loss during this really bad economic times, just like they did during SARS. What's the big deal? Guess what? LH is also reporting a loss even though they were one of few to have a profit in 2008. No one is immune. We'll see when this is over who will bounce back faster and stronger. That's where we'll see who really is best.


User currently offlineHuaiwei From Singapore, joined Oct 2008, 1114 posts, RR: 1
Reply 9, posted (5 years 1 month 2 weeks 5 days 3 hours ago) and read 10621 times:

Quoting Docpepz (Thread starter):
SIA announced an enormous S$307 million (US$213 million) loss for the quarter ending 31 March, compared to analyst expectations of a loss of S$30 million (Analysts = BIG FAIL)

Er I think it should read 30 June. 

Quoting Avek00 (Reply 3):
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!

Please don't shatter the "conventional wisdom" of so many a.nutters that SQ is superior in every way to everyone else, especially USA legacy carriers -- it could lead to all sorts of irrational thoughts and rash behaviors.

I would think anyone with "conventional wisdom" would greet the above news with dismay, albeit because it is another indication that the Boeing 747s are going to be dropped like a hot potato the soonest the airline could, that it would accelerate retirement of the older 777s, that it may suspend the longest flights in the world to the US, and also possibly suspend one of its most surprising destination of late...IAH, and that the people of San Francisco will just have to wait longer before they can see the A380 regularly at their doorstep.

I can only feel sorry for an American who actually gloats at such a development.

[Edited 2009-07-30 08:50:40]


It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineAirzim From Zimbabwe, joined Jun 2001, 1205 posts, RR: 1
Reply 10, posted (5 years 1 month 2 weeks 5 days 2 hours ago) and read 10368 times:



Quoting Huaiwei (Reply 9):
I can only feel sorry for an American who actually gloats at such a development.

I think he was being facetious and calling out the hypocrisy of many posters regarding how US carriers are terribly run and how they should emulate the Asian brethren which is the only model which to aspire.

I think the point he was making, was all airlines are in this together. People in glass houses shouldn't throw stones, etc.

Don't get too defensive, you're starting to act like a Singaporean.


User currently offlineHuaiwei From Singapore, joined Oct 2008, 1114 posts, RR: 1
Reply 11, posted (5 years 1 month 2 weeks 5 days 2 hours ago) and read 10272 times:

Quoting Airzim (Reply 10):
I think he was being facetious and calling out the hypocrisy of many posters regarding how US carriers are terribly run and how they should emulate the Asian brethren which is the only model which to aspire.

I think the point he was making, was all airlines are in this together. People in glass houses shouldn't throw stones, etc.

It appears that you are giving him lots of benefit of the doubt, although I think all that is needed is to read past comments to get a better idea of individual personalities and inclinations towards certain issues. Unfortunately, the sarcasm is hard to miss, contrary to what you may think. In the meantime, the various setbacks I listed above are real fears that people harbour over the direction the airline may take, many of which have an impact on some Americans in some way or other. My point is obviously to highlight how poverty-thy-neighbour is not something to be celebrated especially in a aviation-enthusiast forum. Have you chosen to sidestep my primary message in return?

Quoting Airzim (Reply 10):
Don't get too defensive, you're starting to act like a Singaporean.

I am seriously amazed that someone based in Zimbabwe actually knows how a typical Singaporean acts! We must have punched above our own weight once again! 

[Edited 2009-07-30 09:44:53]


It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17491 posts, RR: 45
Reply 12, posted (5 years 1 month 2 weeks 5 days 2 hours ago) and read 10197 times:



Quoting Huaiwei (Reply 9):
that it may suspend the longest flights in the world to the US

Every time one of those 345s takes off these days it must be like watching $100K go up in flames



E pur si muove -Galileo
User currently offlineAirbazar From United States of America, joined Sep 2003, 8363 posts, RR: 10
Reply 13, posted (5 years 1 month 2 weeks 5 days 1 hour ago) and read 9763 times:



Quoting Airzim (Reply 10):
I think he was being facetious and calling out the hypocrisy of many posters regarding how US carriers are terribly run and how they should emulate the Asian brethren which is the only model which to aspire.

I think that's pretty incorrect. i'd be happy if US legacy carriers would emulate European carriers  Smile We all know that Asian carriers have different economic forces at play when compared to the carriers in the West. What cracks me up is that SQ reports a 1 quarter loss in what seems their entire history and all of sudden they're no better managed than the US legacy carriers  rotfl   rotfl   rotfl 


User currently offlineLipeGIG From Brazil, joined May 2005, 11438 posts, RR: 58
Reply 14, posted (5 years 1 month 2 weeks 5 days ago) and read 9540 times:
AIRLINERS.NET CREW
FORUM MODERATOR



Quoting Airzim (Reply 10):
I think he was being facetious and calling out the hypocrisy of many posters regarding how US carriers are terribly run and how they should emulate the Asian brethren which is the only model which to aspire.

The fact is that both US Carriers and Asian (as well as mostly worldwide) deployed a lot of additional capacity looking for a world that never become true (more travelers, more premium seats...) and now, all are paying the price in the form of loses
There's still a lot of premium capacity that is too much for the market current demand, and the problem is, it's not that easy to configure aircrafts or just remove schedules.

LH, BA, SIA, AF... all are in red right now and it's funny that mostly US carriers are at least getting operational profits meaning that in fact, they made their homework or just because they are not so premium, the market that face the major drop in revenue.



New York + Rio de Janeiro = One of the best combinations !
User currently offlineHuaiwei From Singapore, joined Oct 2008, 1114 posts, RR: 1
Reply 15, posted (5 years 1 month 2 weeks 5 days ago) and read 9432 times:



Quoting Airbazar (Reply 13):
We all know that Asian carriers have different economic forces at play when compared to the carriers in the West.

And airlines from both Europe and Asia are bleeding, so why aren't those "different economic forces" helping the later?

Quoting LipeGIG (Reply 14):
they made their homework or just because they are not so premium, the market that face the major drop in revenue.

"Conventional wisdom" would say that it is much more the later than the former. For an airline like SQ which derives over half its revenue from premium pax, it would be quite a shock if it still earns some pennies!



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineLipeGIG From Brazil, joined May 2005, 11438 posts, RR: 58
Reply 16, posted (5 years 1 month 2 weeks 4 days 22 hours ago) and read 8941 times:
AIRLINERS.NET CREW
FORUM MODERATOR



Quoting Huaiwei (Reply 15):
"Conventional wisdom" would say that it is much more the later than the former. For an airline like SQ which derives over half its revenue from premium pax, it would be quite a shock if it still earns some pennies!

Agree, that's why the big losers are airlines like SQ, BA and LH among some others, all of them with huge F/C cabins, and with premium passengers being a bigger share of total revenue. No doubt DL/AA/CO fleet of 763 with around 20% premium seats provide a good shield right now.



New York + Rio de Janeiro = One of the best combinations !
User currently offlineSomeone83 From Norway, joined Sep 2006, 3386 posts, RR: 3
Reply 17, posted (5 years 1 month 2 weeks 4 days 22 hours ago) and read 8822 times:



Quoting LipeGIG (Reply 16):
No doubt DL/AA/CO fleet of 763 with around 20% premium seats provide a good shield right now.

Have you seen those 3 companies results for the last 6 months  stirthepot 


User currently offlineAFGMEL From Australia, joined Jul 2007, 744 posts, RR: 0
Reply 18, posted (5 years 1 month 2 weeks 4 days 20 hours ago) and read 8316 times:

SQ is superior to most carriers as a quality product, but they are not immune from global economic forces.

While I would prefer to fly SQ long haul, I am not paying those prices. Like QF they had enjoyed a lot of premium traffic, but not so much lately.



B 727-44/200 732/3/4/8/9 767-3 742/3/4, 772/3, A319/20/21 332/333 342/3 , DC3/4/10, F28/50/100, ATR72
User currently offlineLAXintl From United States of America, joined May 2000, 25353 posts, RR: 49
Reply 19, posted (5 years 1 month 2 weeks 4 days 19 hours ago) and read 8023 times:



Quoting Docpepz (Reply 7):
Which major airline does not control its own ground handling unit in its home base? BA, QF, AF/KL, MH, TG, CX all have their own ground handling units in their hubs.

I'm sure many airlines would love not to self handle, and be able to rely on a 3rd party only if union contracts would allow so. Any how SQ was not self handled anyhow, it already had a client-customer relationship with SATS.

Quoting Docpepz (Reply 7):
Even though SIA and SATS signed a 5 year ground handling agreement 2 months ago, what's there to stop SATS from doubling its prices in 2014?

Market pressures. If SATS want to bid far outside the norm, I'm sure there are plenty of global handling companies from Menzies, Servisair, Swissport etc, which would love to have the SQ business.



From the desert to the sea, to all of Southern California
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 20, posted (5 years 1 month 2 weeks 4 days 17 hours ago) and read 7564 times:

SIA is barely down 1% on the SGX this morning. I suppose the anticipated dividend of SATS in 2 weeks is keeping the share price up. It is indeed a joke, as when QF announced a profit warning in April this year their share price plunged 10% in the first 2 hours of trading.

Actually, SQ is very smart. In March they knew this would happen, so they announced the in specie dividend of SATS for August, so that in the short term, the share price would be protected from plunging no matter what horrendous result they produce.

Why didn't they teach us this in finance/economics? If your company is doing badly, you anticipate this in advance, and announce nearly half a year in advance that you will distribute your profitable subsidiaries directly into the hands of shareholders in 6 months. This keeps the share price steady for 6 months, as investors anticipate the nice dividend yield.

Then you hope that in 6 months time things turn around.

Let's see where their shareprice goes ex-dividend.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 21, posted (5 years 1 month 2 weeks 4 days 6 hours ago) and read 6181 times:

Not all airlines went into this crisis the same and not all will emerge the same. SIA has been a very well run company but like EK has some advantages to being relatively young.

It is unfortunate that any airline or its people go through these kinds of troubles but the airline business is highly turbulent.

The biggest factor that will determine how well SQ emerges from this will be high developed the low fare carriers are in taking market share before the economy turns around. Unlike the Japanese and other East Asian gov'ts, Singapore has been very open to more competition. LFCs thrive when times are bad and it comes at the expense of the established carriers.

Further, since so much of SQ's and other East Asian carriers revenue comes from cargo, it may be years before things are back to "normal".

Finally, SQ's choice of the 345 may indeed be a huge vulnerabililty in the coming years if not months. If someone chooses to add 777LR service on routes which are now served by the 345, there is no doubt the 777LR will be able to make the route economically viable long before the 345 can. There aren't too many head to head contest that SQ could get itself into that they would be at a disadvantage but any ULH flying they do against the 777LR will see the 777LR operator win.


User currently offlineAirbazar From United States of America, joined Sep 2003, 8363 posts, RR: 10
Reply 22, posted (5 years 1 month 2 weeks 4 days 6 hours ago) and read 6147 times:



Quoting LipeGIG (Reply 14):
LH, BA, SIA, AF... all are in red right now and it's funny that mostly US carriers are at least getting operational profits meaning that in fact, they made their homework or just because they are not so premium, the market that face the major drop in revenue.

No, the recession hit the US a lot earlier than in the rest of the World. It started here first and it will end here first. In fact we're already on the way up and the small operating profits that you speak of are a result of that upswing. That and all the extra fees that the airlines are charging  Smile

Quoting Huaiwei (Reply 15):
And airlines from both Europe and Asia are bleeding, so why aren't those "different economic forces" helping the later?

They are helping the later. The fact that they've been a lot more profitable over hte years means they have a much better product and cash on hand to weather this recession. They also have much lower labor costs which will help them coming out of this recession. This is a short term event.


User currently offlinePellegrine From United States of America, joined Mar 2007, 2443 posts, RR: 8
Reply 23, posted (5 years 1 month 2 weeks 4 days 6 hours ago) and read 6124 times:



Quoting WorldTraveler (Reply 22):
but like EK has some advantages to being relatively young.

SQ isn't a "young" airline, they were founded in 1947.

Quoting WorldTraveler (Reply 22):
Finally, SQ's choice of the 345 may indeed be a huge vulnerabililty in the coming years if not months. If someone chooses to add 777LR service on routes which are now served by the 345, there is no doubt the 777LR will be able to make the route economically viable long before the 345 can.

No one on earth can possess traffic on nonstop SIN-LAX/JFK the way SQ can. Who has the aircraft? DL? DL is not about to serve Singapore nonstop.

Quoting WorldTraveler (Reply 22):
There aren't too many head to head contest that SQ could get itself into that they would be at a disadvantage but any ULH flying they do against the 777LR will see the 777LR operator win.

It's more complicated than that because you are only looking at the cost side. On the revenue side...there is no US carrier hubbing in LAX or JFK that can attract premium traffic the way SQ does.



oh boy!!!
User currently offlineKoruman From , joined Dec 1969, posts, RR:
Reply 24, posted (5 years 1 month 2 weeks 4 days 5 hours ago) and read 6099 times:

I'm surprised that people are surprised that Temasek is conducting itself in such a way.

As people may or may not be aware, it is owned by the government of Singapore and its CEO just happens to be the wife of the Singapore Prime Minister, whose father, of course, was previously the PM for decades.

Singapore Airlines is in many ways viewed as a kind of trophy possession by the Singapore government, which is why it has to fly planes stuffed full of absurdly wide premium seats which no-one wants to buy.

SIA is now desperately trying to protect its chances of selling business class seats by avoiding installing the sort of Premium Economy product which is currently keeping Qantas, Virgin Atlantic and Air New Zealand afloat in a global recession. If they were to install such seats, goes the logic, they would cannibalise their already moribund premium cabins.

SIA had a great run while the world was booming, and was able to charge a premium for its high quality product.

But there have been signs for at least a decade that the actual business management of SIA is often inept. A well-known case is their strange investment in Virgin Atlantic, but even more inept was their attempt to go up to 49% ownership of Air New Zealand in 2001, which culminated in them writing off a substantial investment. Their courtship of Ansett was similarly inept (and ill-advised), and their 49% stake in Tiger Airways has not delivered anything.

So no, I'm not surprised by them producing a dividend in such a way. But I will be surprised if they get themselves out of the hole into which they have dug themselves.


25 Olympic472 : It is amazing how much can be done with SQ. This latest exercise clearly is aimed at propping up SQ's share price, and they succeeded.
26 MaverickM11 : I don't think SQ is even making ULH work, especially now
27 Airbazar : It's not just SQ. This happens with any well diversified company. How do you think LH reported a profit in 2008 when seemingly everyone else in Europ
28 Docpepz : SQ is about to distribute its ground handler away as an "in specie dividend" to its shareholders. So what will they have to give away at the end of t
29 LAXintl : And what is wrong about "gratification" of shareholders? A for profit company should rightfully be run to maximize shareholder returns.
30 EDICHC : Well I don't see them filing for bankruptcy protection.... SQ have one of the most modern fleets, arguably the best cabin staff, hub at probably the
31 Airbazar : Maybe not directly and officially. that would likely be illegal or at best "moraly wrong". But they sure as heck give them plenty of tax advantages a
32 EDICHC : I only have a single word answer to that.....ALITALIA!
33 Theducks : I took this routing from Perth (PER-SIN-ICN-YVR) in 2006 when I visited Canada. As they pulled it, I didn't take any flights with SQ this year, inste
34 Avek00 : I don't think this will be much of a concern as there are literally all of just two airlines that could have even the slightest possibility of going
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Virgin Blue Vows To Give Away Free Seats posted Mon Feb 23 2004 22:17:39 by ANstar
Ryanair To Give Away 6000 Free Seats To And From.. posted Thu Jun 13 2002 19:33:02 by Capt.Picard
Kingfisher Air Q1 Net Loss: US$50M, Debt: US$1.25B posted Wed Jul 29 2009 05:26:41 by SInGAPORE_AIR
SIA Reduces Non-stop SIN To US Flts posted Sun Jan 25 2009 13:58:11 by LondonCity
SQ: Pressure Builds To Give SIA Pacific Access posted Tue Jul 8 2008 01:34:29 by Gbb777
US Airways Post Q1 Loss - $236mil posted Thu Apr 24 2008 06:21:23 by LAXintl
US Airways To Charge $25 For 2nd Checked Bag posted Tue Feb 26 2008 12:49:59 by RW170
US Airways To Get A340s For New China Routes! posted Wed Jan 2 2008 11:35:51 by EI321