SIA banks on surging West Asia and Africa load factors as Europe loads dip

It’s just a short-term dip, assured SIA.

Singapore’s flag-carrier didn’t feel the pinch of a decline in loads to Europe as a strong load factor improvement from West Asia and Africa picked up the slack.

According to analysts from UOB Kay Hian, the dip in Europe loads was due to softer passenger demand brought about by the terrorist attacks in France.

Meanwhile, UOB Kay Hian said Singapore Airlines (SIA) is confident that this is a short-term dip, suggesting signs of recovery in European demand.

“Overall, 3Q’s strong loads are encouraging and suggest that SIA’s efforts to improve operations to boost utilisation are bearing fruit,” UOB Kay Hian said.

On the other hand, SIA’s Scoot’s load factors also grew by 0.3ppt due to strong demand.

“Also, Scoot’s traffic grew by 22% ytd, resulting in a 2.6ppt load factor improvement even with rapid capacity expansion. Meanwhile, SilkAir’s pax loads rose 0.1ppt in December, but registered a 0.6ppt decline in 3QFY16 loads due to weaker loads in October,” UOB Kay Hian said.

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