SINGAPORE (Oct 16): Macquarie Research is maintaining Singapore Airlines at “outperform” with lower target price on higher fuel estimates.

In Sept, SQ, the company’s main brand and key profit driver, carried 5.7% more traffic, outpacing the 1.4% capacity increase, resulting in improved load factor across all route regions.

For 2Q19, Macquarie analyst Azita Nazrene expects strong revenue headline growth of 11%, given strong 9% traffic growth, to be offset by higher cost, as it foots an estimated 35% higher fuel bill. This would result in an adjusted profit after tax of $150 million, down 20% y-o-y.

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