Singapore Airlines slacks off in bringing tourists

Singapore's visitor arrivals by air grew 13.6% but SIA's passengers grew only 6%.

According to UOB Kay Hian, SIA is not participating in growth in Singapore’s visitor arrivals. Singapore’s visitor arrivals by air grew 14.7% yoy in 2011 and 13.6% ytd in 2012. In comparison, SIA’s pax carriage grew only 0.8% and 6.0% for the two periods respectively.

"Growth numbers are substantially better on short-haul routes as subsidiary SilkAir showed an 18.6% yoy growth for 5M11. However, passenger load factor for the regional carrier declined as capacity growth outpaced traffic growth. SilkAir’s pax traffic is only 5% of SIA’s but its operating profit in FY12 was disproportionately high at 58% of the parent airline’s, underscoring the relatively high risk of long haul operations. "

"For 2012, we estimate visitor arrivals to increase 8% yoy in 2012 to touch 14.2m. The key risk for SilkAir is intensifying competition from other full-service carriers such as Garuda Indonesia, Batik Air, Thai Airways and Chinese airlines."