Singapore aviation sector profitability to remain subdued in 2014

Aggressive competition will hurt earnings most.

"While the overall economy should improve, competitive pressures amongst the carriers – both in the premium and LCC segments – will result in overall lower passenger yields and reduced profitability," said OCBC Investment Research.

This led the research firm to downgrade the aviation sector's investment rating to Underweight entering the calendar year 2014.

OCBC also had no investment preference between Singapore Airlines and Tiger Airways as both face their own glaring issues.

"The former still relies on promotional fares to stimulate demand and capacity increases have placed pressure on load factors and yield while the latter face downside risk from continued losses by its associate airlines," the research firm said.