SIA Resumes Dividend; Macroeconomic Risks on the Horizon

Singapore Airlines, or SIA, is Singapore’s flagship carrier with a strong brand based on superior cabin service. However, the company’s dominance had been weakened in the prepandemic years by low-cost carriers, or LCCs, and the aggressive overseas expansion of the middle east's national carriers and Chinese airlines. While SIA has been building its discount brand Scoot, the proliferation of LCCs, however, made it difficult for SIA to maintain its market share and margins at the same time. However, we think the coronavirus disruption is giving SIA a temporary advantage as SIA's financial strength and well planned staff resources are enabling the carrier to bring out more flights to capture the rebound in travel demand.