SIA Signals Low Near-Term Visibility and Commitment to Air India

Singapore Airlines 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 and the aggressive overseas expansion of Middle East national carriers and Chinese airlines. While SIA has been building its discount brand, Scoot, the proliferation of LCCs has made it difficult for SIA to maintain its market share and margins simultaneously. We think the coronavirus disruption offered a temporary advantage, as SIA's financial strength and well-planned staffing enabled the carrier to add more flights to capture the rebound in travel demand. But with international capacity normalizing, we have seen rising competition.