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Singapore Airlines’ earnings to take a massive hit amid spate of Europe attacks
About 30% if SIA’s capacity is devoted to the continent.
Singapore’s flag carrier is bound to see more empty seats in its Europe-bound flights after the region was shocked by a flurry of terrorist attacks.
According to a report by UOB Kay Hian, Europe is a significant market for Singapore Airlines (SIA) with 14 destinations within Europe and about 30% of SIA’s seat capacity in km-terms is directed to Europe.
“Going forward, we expect tourism and pax traffic to Europe to be adversely impacted in the near term and SIA’s loads and yields to Europe are likely to decline,” UOB Kay Hian said.
UOB Kay Hian added that even before the attack in Nice, France, SIA’s pax loads to Europe have weakened for three consecutive months. In June, load factor to Europe fell by 5ppt yoy, accelerating from the declines in April and May (Apr: -0.6%, May: -3.1%).
“In 1QFY17, loads to Europe averaged 71.9%, significantly lower than 1QFY16’s 74.8%. Meanwhile, SIA’s overall pax load factor fell 2.1ppt and 0.4ppt in June and 1QFY17 respectively,” UOB Kay Hian said.
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