Singapore Airlines Falls Most in 14 Months on Fare Drop

Singapore Airlines Ltd. (SIA), Asia’s second-biggest carrier by market value, dropped the most in more than 14 months in the city on concerns that ticket prices may be under more pressure amid growing competition.

Singapore Air fell 2.5 percent, the biggest decline since May last year, to close at S$10.33. The stock was the worst performer among 30 companies in the Straits Times Index today.

Aggressive fares and capacity injections from competitors will continue to pressure yields, a measure of ticket prices, the company said yesterday. Singapore Air’s first-quarter profit dropped 71 percent because of lower fares and bigger losses from affiliates including Tiger Airways Holdings Ltd.

“The guidance suggests a challenging passenger yield environment, especially given continued competition from the Middle Eastern airlines,” HSBC Holdings Plc said in a report today, downgrading Singapore Air’s stock to neutral, or hold, from overweight, or buy. “Until SIA can start to show a sustainable earnings recovery, we believe there are limited near-term share price drivers.”

Net income in the three months ended June fell to S$34.8 million ($28 million) from S$121.8 million a year earlier, the airline reported yesterday. Sales dropped 4.1 percent to S$3.68 billion.

Photographer: Munshi Ahmed/Bloomberg

A Singapore Airlines Ltd. aircraft prepares to land at Changi Airport in Singapore. Close

A Singapore Airlines Ltd. aircraft prepares to land at Changi Airport in Singapore.

Close
Open
Photographer: Munshi Ahmed/Bloomberg

A Singapore Airlines Ltd. aircraft prepares to land at Changi Airport in Singapore.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Khalid Qayum

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.