To The Moon

$SINGAPORE AIRLINES LTD(C6L.SI)$

Positive guidance from US airline hints of similar bright outlook for SIA

American Airlines (AAL) upgraded its 3Q22 guidance

- 3Q revenue is seen to be 13% higher compared to 2019 level

- Positive surprise in leisure travel and ongoing recovery in business trips

- Higher revenue expectations despite lower flights compared to 2019 shows airline can pass on cost to travelers

SIA is poised to witness similar trends, with these positive signals

- Passenger load factors in the months of Jul-Aug for SIA was 85.2-87.7% while that for Scoot was 86-86.2%, signaling a strong recovery for both carriers

- Number of flights that airlines have filed to operate by the year end amount to 80% of pre-Covid levels, according to Singapore Transport Minister

- SIA increased its frequency of flights to East Asia, with its first-mover advantage in resuming flights to China (e.g., Beijing, Chengdu, Wuhan and Zhengzhou to start this week)

- Scoot added new routes (e.g., Lombok and Makassar) and flights (e.g. seasonal non-stop flight to Sapporo)

- Aviation to ramp up capacity to 100% of pre-Covid levels: T4 reopened on 13 Sept, southern wing of T2 to commence departure operations on 11 Oct

SIA is scheduled to release its quarterly earnings on 4 November. I feel that this stock will be bullish when the earnings results are announced. It could be a good time to accumulate more with the current market downtrend. I am quite vested in this stock and my views could be biased, DYODD before making any investment decisions.