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Look for more signs of yield stabilisation before leaping into Singapore Air: OCBC

PC Lee
PC Lee2/20/2018 03:13 PM GMT+08  • 2 min read
Look for more signs of yield stabilisation before leaping into Singapore Air: OCBC
SINGAPORE (Feb 20): Despite strong demand outlook, OCBC wants to see more consistency in the stabilisation of yields for Singapore Airlines before jumping in and is looking for opportunities to accumulate at $10 and lower.
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SINGAPORE (Feb 20): Despite strong demand outlook, OCBC wants to see more consistency in the stabilisation of yields for Singapore Airlines before jumping in and is looking for opportunities to accumulate at $10 and lower.

"Looking ahead, OCBC expects the strong passenger and freight traffic growth to sustain on the back of broad-based global economic growth outlook, resulting in stabilisation of yields," says lead analyst Eugene Chua in a recent report who has a $10.85 fair value for SIA.

While Chua expects net fuel costs to be higher in 4Q18 and into FY19, SIA says it is unlikely to fully pass the increase in input costs to passengers due to the competitive landscape on some of SIA’s key routes.

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