SINGAPORE (May 21): Analysts are now more positive on Singapore Airlines than any time over the past three years given higher fuel prices could alleviate some of SIA’s competitive pressure from Chinese carriers.
The SIA group has hedged 45% of its jet fuel requirements at US$65/bbl jet fuel for the next five years, against spot jet fuel price of US$90/bbl, says CGS-CIMB Securities.
While SIA will still be negatively affected by pricier oil, its hedging position gives it a competitive advantage against Cathay Pacific, and the unhedged Chinese and Middle Eastern Gulf carriers.
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