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Going down? Now is at 6.07. Is it a good time to buy and why?
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Elijah Lee
13 Apr 2020
Senior Financial Services Manager at Phillip Securities (Jurong East)
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Colin Lim
13 Apr 2020
Financial Services Consultant at Colin Lim
Top fund managers dont have airline in their portfolio... Even Buffett sell off delta airline..
SIA is competing with budget airlines.
Airline is dependent on Oil. Thus very sensitive to oil prices.
SIA is on the decline for many years.
I wont buy SIA.
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SIA is a beautiful & nice airline, but not a good investment.
It underperformed the STI index even ...
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Hi Ran,
I won't invest in SIA. As an airline, it is very sensitive to events like COVID, and it just took 3 months before it had to slash more than 90% of scheduled flights. On top of that, the company's main competition will be other airlines, and many airlines are backed by their national governments in some form or another (i.e. your competition can't die). In such a cut throat industry, SIA will be unlikely to shine as an investment for the long term.
You can consider services that are involved in the airline industry however. Such service companies are quite diversified in their revenue source as they probably serve many airlines, not just one. An example is SATS.
There's a saying (I can't remember it exactly) that goes something like "To be a millionaire, be a billionaire and then start an airline". I think that says a lot about the airline industry as a whole.