Singapore Airlines shaken by depressing number of business travellers

Cost-cutting among companies leave the airline wounded.

Singapore Airlines (SIA) is in for major headwinds as its yields are likely to be affected by oil prices and uncertainties in the corporate travel market.

According to UOB KayHian analyst K Ajith, the layoffs and moves being done by corporates to conserve cash could affect the travel market and hurt SIA.

"This is likely to affect Singapore Airlines and Cathay Pacific as some 30% of their pax revenue is attributed to corporate travel," he said

Meanwhile, he noted that average return fare has declined 20% since mid-2015 even as fuel prices rebound.

"Yields for Southeast Asian full-service carriers have declined by an even greater quantum due to heightened competition from low-cost carriers (LCCs) which have a greater than 50% market share of intra-Asia seat capacity," the analyst said.

With this, Ajith said only China and Thailand are likely to see yields stabilise or even improve, especially if crude oil prices rise.

"We believe SIA and CX face structural challenges at their respective hubs and that valuations will remain depressed until yields start creeping up, which is likely to happen only if fuel prices rebound." he explained.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia