Here's what SIA needs to do instead of aggressively discounting prices

This strategy is unsustainable in the long-run.

Singapore Airlines carrier should rationalise capacity on unprofitable routes instead of aggressively discounting prices, argued UOB Kayhian.

According to the brokerage firm, the Singapore flag carrier should rationalise unprofitable routes, cut capacity or frequency to improve yields and profits, as its current strategy is seen unsustainable in the long-run. This came as SIA registered its first Q4 loss in three years.

"Parent airline’s profitability stands in stark contrast to that of SilkAir and budget carriers. We believe the losses could be due to a steep 7.5% decline in pax yields in February. While the rate of decline subsequently narrowed to 4.8% in March, we are unsure if the improvement will continue," UOB Kayhian said.

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