Good morning
SIA released its Feb op stats
- February is SIA's eighth consecutive month of load factor improvement
- SIA's loads improved 2.2ppt as pax traffic growth outpaced capacity expansion, with broad-based load factor improvement across all regions
- Greatest improvement was seen in Europe (+4.3ppt) which has relatively higher premium traffic
- In addition, both SilkAir and Scoot also recorded strong traffic growth. SilkAir's traffic rose 10.6% yoy in Feb while Scoot's rose a whopping 48%
- In an environment of weak jobs growth and soft global economy outlook, SIA's strong traffic highlights the willingness to travel for both full-service and low-cost segments
- Pax yields are also likely to be resilient, given strong loads on long-haul routes. SIA's CEO has been on record stating that no weakness was seen in business demand.
Maintain BUY, with unchanged Target price S$13.90.
