UOB KayHian downgrades Singapore Airlines (C6L.SG) to Hold from Buy and cuts its target price to $15.90 from $18.00 after the carrier's November passenger traffic growth was a "dismal" 1.1% on year.

"For the past two months, growth averaged 0.3% and 4Q is a traditional peak period for SIA. This number does not lend much confidence to SIA's growth prospects."

Notes passenger load factor fell 3.0 ppts in November, double October's decline, while cargo traffic slowed as expected. Says the "much vaunted traffic recovery did not materialise...SIA's profit recovery came on the back of a yield recovery, surge in cargo traffic and lower fuel prices.

The ability to sustain these remains questionable, especially in the wake of ongoing competition from low-cost carriers and the Middle Eastern carriers."

Cuts its FY11 net profit forecast by 1.4% and FY12 by 18.5% on lower traffic growth assumptions.

The shares are off 1.2% at $15.28.

 

 

/theedge/

 

Singapore Airlines (C6L.SG) gaps down at the opening and is last off 0.9% at a 4-month low of $15.32, after the carrier released data showing lower November load factors due to capacity growth outpacing the traffic increase.

“SIA has been adding passenger capacity over the past few months, which in November was particularly aggressive,” says Kim Eng Securities, which has a Buy call with a $18.90 target; “however, we remain comfortable with SIA’s loads in the high seventies, with yields set to improve given that SIA’s ticket prices have been trending upwards.”

November’s overall load factor was 70.1% vs 72.3% a year earlier and 71.1% in October. Support is expected at the August low of $15.06.

/theedgesingapore///

 

Singapore Airlines (SIAL.SI), the world’s second-biggest carrier by market value, said on Wednesday it filled 70.1% of the space available on its planes for passengers and cargo last month.

The figure was lower than the 71.1% recorded in October, and November 2009’s 72.3%.

The airlines said the lower load factor was largely due to additional capacity that SIA put back in place to accommodate higher demand for air travel as the global economy recovers.

“In November 2010, Singapore Airlines’ capacity, measured in available seat kilometres, grew 4.9 percent year-on-year... As a result, passenger load factor declined by 3.0 percentage points to 78.9%,” SIA said in a statement.

November’s passenger load factor was lower than the 79.6% recorded in October and 81.9% a year ago.

/theedgesingapore/i came i read i posted FY reading pleasure///

 

Singapore Airlines (C6L.SG) +0.3% at $15.88, extending yesterday’s 2.7% rise which came despite news carrier setting aside $61.92 million this FY to pay fine in US relating to cargo price fixing investigation.

“With the resolution on the cargo fine in the US, we believe a key uncertainty on the carrier’s earnings has been removed,” says Morgan Stanley, which has Overweight rating, $19.70 target.

Adds, exceptional charge does not affect current EPS estimates, provision for EC cargo fine in 3Q10 is sufficient, expects SIA Cargo management to negotiate more favourable term on EC fine. Keeps DPS estimate at $0.70 for FY2010.

Goldman Sachs says provisions result in 4.1% decrease to post-exceptional FY11 EPS estimates, but “we do not view these changes as material, and there is no change to our investment thesis, (Buy) rating or ($19.50) price target.”

Next resistance eyed at $16.34 November peak.

/theedgesgp/