Singapore Airlines will be plagued by these problems this year

Operating profit has dropped 17%.

According to CIMB, SIA‟s core net profit improved by 15% yoy in the last quarter largely due to a rise in non-operating items (surplus on sales of aircraft, spare parts and higher net interest income).

The core business' operating profit declined 17% yoy. Yields across both passenger and cargo businesses were softer than expected as the parent airline continued with its promotional activities in an attempt to boost traffic, while the latter declined 4% yoy despite SIA's attempts to boost loads by cutting capacity.

Here's more from CIMB:

Guidance remains muted, with the company highlighting that both yields and loads for its passenger and cargo businesses are expected to remain under pressure.

The depreciation of revenue generating currencies against the S$ continues to be cause for concern to management as well.

We prefer to stay away from SIA as we see structural difficulties remaining as a consequence of the growth of the LCCs and Middle Eastern airlines.