Can SIA soar competitively against Middle Eastern carriers?

Analysts say its Lufthansa JV is a good move.

Singapore’s flag carrier is constantly looking to enlarge its coasts by launching flights to ever diverse destinations.

As it moves towards expanding its reach into Europe, analysts are wondering if it could compete with the Middle Eastern carriers which dominate the region’s airspace.

According to analysts from UOB Kay Hian, they are optimistic on Singapore Airlines’ JV and partnership with Lufthansa which involves cooperation and codesharing for key markets in Europe, as it would expand SIA’s geographical reach.

UOB Kay Hian says SIA could tap Lufthansa’s network in Frankfurt, Munich, and Zurich.

“With the expanded network, SIA could position itself to compete with the Middle Eastern carriers and potentially establish new routes with higher yields,” UOB Kay Hian said.

Meanwhile, SIA has more reasons to be optimistic as it registered higher loads for its parent airline and subsidiaries.

“Going forward, pax yields are likely to be higher qoq due to a seasonally strong 3Q. Moreover, lower hedging losses should also lead to lower opex for the carrier,” UOB Kay Hian said.