Singapore Airlines to be threatened by Middle Eastern peers on 'Kangaroo Route'

Here are reasons why.

According to CIMB, SIA has chosen to focus on a core set of route regions– intra-Asia and Australia-Europe. We think that SIA will use SilkAir to provide regional feeds into these key regions and its partnerships with Scandinavian Airlines and Virgin Australia will give it connectivity at the end of its long-haul flights.

"Although we understand SIA’s decision to fall back on routes that have been successful in the past, we are concerned about the threat that the Middle Eastern carriers pose to SIA on the ‘Kangaroo Route’," CIMB said.

Here's more from CIMB:

SIA flies a very similar route profile to Emirates and Etihad. This is particularly evident in the percentage of capacity to Europe.

The Middle Eastern carriers seem to have lower Australian penetration than SIA, which we believe is the result of the partnerships between Emirates and Qantas, as well as Etihad and Air New Zealand.