OCBC maintained its HOLD call on Singapore Airlines (SIA) with a fair value S$10.85. Singapore Airlines is dropping its flights to Athens and Abu Dhabi after continued weak demand for this routes. SIA will continue to serve Dubai in the UAE and offer connections to Athens via its Star Alliance partners.
The Singapore Business Times also carried an extensive interview with SIA CEO Goh Choon Phong, who shared his vision in growing the group. SilkAir is likely to play an increasingly larger role within the group and will grow its service network to more regional secondary cities, and serve as a more extensive feeder to the parent airline.
There is also a possible Scoot tie-up with Tiger Airways. Scoot is SIA's new mid-to-long haul low caost carrier that will be flying to Bangkok from Jul 2012. What baffles many investors is the act of "self-cabinalisation" where it is competing directly with the group's 33% owned Tiger Airways. The CEO revealed that they are looking at increasing collaboration between both low cost carriers (i.e. Scoot and Tiger Airways).
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