What are your thoughts on the airline industry, such as SIA and SATS?

Hi Meralyn,

Airlines are cut throat industries with no real economic moat between any particular airline as they all try to outdo each other to win market share. For that reason alone, it's enough for me to stay away from investing in them.

However, companies servicing airlines (such as SATS) don't have to worry about whether a particular airline goes bust. Short of air travel being replaced by hyperloops or teleportation, it is likely that the demand for air travel will continue to grow after COVID and there are companies which have positioned themselves well to capitalize on the potential business in this sector, such as SATS.

And of course, I would not focus on just one sector and one stock if I am going to invest.

Hi Meralyn, I don't really like airline stocks. I wrote a piece on SIA here.

I like SATS although it would be hit by near-term headwinds due to Covid-19. I wrote an analysis of the company some time back on our blog (link here). Over the long-term, I believe SATS should perform well.