Chart of the Day: Can Singapore’s aviation cope with Changi Airport’s soaring pax throughput?

Visistor arrivals surged 12.7% YoY.

Changi Airport’s strong growth bodes well for companies in Singapore’s aviation sector, according to a report by UOB Kay Hian.

Changi Airport’s pax throughput soared 11% in 2M16, led by visitor arrivals by air in January and likely in February as well. Visitor arrivals by air rose 12.7% YoY in January, in line with a 6% YoY climb in aircraft movement.

Data released by Changi Airport Group showed aircraft movement growth in February was even higher at 8% YoY, and this should correspond to strong visitor arrivals by air. The report notes the visitor arrivals growth is on back of visitors from China, Indonesia, Australia, Malaysia, and India (in descending order) leading tourism markets at Changi.

January’s traffic growth was led by a hefty 56% YoY spike in visitor arrivals from China. Visitors from Indonesia, the second largest segment, rose 9% YoY.

“This could be due to a low base in the aftermath of the Indonesia AirAsia QZ8501 crash in Dec 14. However, this is not the case for Chinese visitors which saw double-digit growth for 10 consecutive months,” the report notes.

Meanwhile, SATS is expected to benefit directly from the increased pax throughput and flight movements as 91% and 79% market share of the airport’s pax throughput and flight movements respectively.

Singapore Airlines (SIA), Silk Air, and Scoot’s pax carriage picked up 5.6%, 10.8% and 48.1% YoY respectively in 2M16. SIA and its subsidiary airlines hold a 52% market share of Changi and are thus well positioned to benefit from higher travels to Singapore.

SIA Engineering (SIAEC) will also enjoy the higher flight movements at Changi as SIAEC has an 80% market share in flights handled out of Changi.

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