One must identify and understand the relevant factors affecting each company and subsequently value whether a particular company's price under / over or matches its future value before making a decision.
The airline industry in my opinion has surpassed it's boomtime. Once where passengers only have limited options, siding towards service rather than price between the tradeoffs of both, SIA thrived.
However, with the entry of Low Cost Carriers, the monopolistic nature of Full Service Carriers have been threatened. Yes, LCC's won't fully replace FSC's, but now the pie has to be shared among more players. Millennials are going to be the highest contributors to tourism and when one identifies their spending behaviours, one would understand that they would rather spend more on authenticity rather than comfort and service therefore the market that SIA seeks to capture would still be its business travellers.
Fuel prices, given how it is a finite resource, would tend to be on a rising trend, thus this would further increase the expense of airlines. It is seemingly hard for airlines to innovate to stay relevant and competitive over one another.
From a consumer's perspective, passengers usually seek price, loyalty programmes and time slots when selecting flights and that can be achieved by any airline.
SIA may be a good stock for short-term holding i.e. When it reports quarterly pax load increase / tourism in Singapore hitting new highs, but other than that, I would not hold SIA for the long-run.
Caution on SIA due to the recent bushfire in Australia (lower load) and the B737 Max issues/compensation.
We had seen Turkish Airline getting compensated USD 9.4 million each for their B737 Max, but the compensation depends on various factors. Boeing can also offer more discounts on SIA future aircraft orders. The longer this drag, the less optimistic it looks.
I wouldnt recommend SIA because as people say it is a CAPEX heavy and yet revenue competitive indust...
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