Why SIA is bleeding......and it's not the downturn!

UOB-Kay Hian sees SIA reporting $2.1b hedging loss

The Business Times, February 7, 2009

By Ven Sreenivasan

SINGAPORE Airlines (SIA) will report a huge $2.1 billion hedging loss equivalent to a loss per share of $1.70, says a local analyst.

K Ajith of UOB-Kay Hian calculates that with jet fuel having slumped from US$119 a barrel in October 2008 to US$54 by year-end, SIA will suffer a hedging loss that will depress its book value from $12.25 a share to $10.55.

The estimate is based on SIA's mark-to-market accounting of its outlay on fuel, which UOB-Kay Hian estimates to be hedged at an average of about US$110 a barrel.

'At present, SIA is trading at 0.9 times P/B. And if it remains at 0.9 times with book value dropped, it should trade at a reduced target price of $9.70,' says UOB-Kay Hian.

SIA, which will report its third-quarter earnings on Feb 10, slid 32 cents to close at $10.74 yesterday.

The impact of the hedging loss is not new - SIA chief executive Chew Choon Seng said at the Q2 results briefing three months ago that fuel was hedged around $115 a barrel

http://www.ytlcommunity.com/commnew...age=4&maxrec=10&newsid=43871&vtype=1&langID=1

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SO that's why the poor Singaporean SIA staff now has to pay the price of someone's folly.......

Actually, the ones who made bad management decisions should pay the price....but then, who is there to enforce it? Who can sack the Board?

I say, even the Minister in chraged may not be aware of what is happening in the National Airline.

But then, SIA had always been Harry's baby....

SIA hedged about 36 per cent of its fuel needs at an average price of between $104-$109 a barrel, in line with its policy to hedge between 30-60 per cent.

from -

http://www.asiaone.com/News/Latest+News/Business/Story/A1Story20080807-81240.html

It is a honest mistake, they do not know that oil prices will drop from $115 to....???, they do not know that UBS, CITI..whatever, ABC etc... will drop....they went in too early, too quickly.

But they do know how to be renumerated well for all their achivements, but not their failures...

How would they know?, how could they predict?

Strangely...in the past..they could predict?

IT IS A HONEST BUSINESS MISTAKE lah!...please forgive!, especially those, who have to take long, no pay leave..forgive please!...a honest mistake!

forgive?.......... your head ar

They should be sacked.

Now they ask the small man to pay for their folly.....

Now they want to 'cut costs'........

ok lim hng kiang, goodyear, ho jinx, danabalan...... do your duty.... sack the whole SIA board

Harry Lee said:

forgive?.......... your head ar

They should be sacked.

Now they ask the small man to pay for their folly.....

Now they want to 'cut costs'........

ok lim hng kiang, goodyear, ho jinx, danabalan...... do your duty.... sack the whole SIA board

Click to expand...

forgive lah!..it is a honest mistake!, like the Tsunami's they could not have known!! but when they make money....ahh! that is a different story..it is a GOOD YEAR!, a GOLDEN PERIOD...

but...forgive lah!....a honest mistake!

Harry Lee said:

SIA hedged about 36 per cent of its fuel needs at an average price of between $104-$109 a barrel, in line with its policy to hedge between 30-60 per cent. ...

Click to expand...

never mind 1 la ...

juz like electricity tariff lidat ... jack up all ur prices by 40-70 % 2 cover back ... gao dim oredi ...

Correct me if I'm wrong, bros :o

I thot hedging is quite normal for airlines. If oil price maintained at $130 or increased above, they would be praised for great foresight to hedge at $105++? And SQ is not the only airlines who's made a wrong bet.. practically every other airline suffered the same fate.

But what I'm sure, is they are primarily concerned with their shareholders' interests, and the staff are the sacificial lambs to ensure some "reasonable" dividends will still be paid out.

pia said:

Correct me if I'm wrong, bros :o

I thot hedging is quite normal for airlines. If oil price maintained at $130 or increased above, they would be praised for great foresight to hedge at $105++? And SQ is not the only airlines who's made a wrong bet.. practically every other airline suffered the same fate.

But what I'm sure, is they are primarily concerned with their shareholders' interests, and the staff are the sacificial lambs to ensure some "reasonable" dividends will still be paid out.

Click to expand...

the company has always been a lean operation, and finding new ways of squeezing the juice & forcing its golden geese to lay as many golden eggs as much as possible...

since in good times it's been actively squeezing money out, certainy in bad times like this they realise there's no more juice to squeeze, & no meat left liao...

pia said:

Correct me if I'm wrong, bros :o

I thot hedging is quite normal for airlines. If oil price maintained at $130 or increased above, they would be praised for great foresight to hedge at $105++? And SQ is not the only airlines who's made a wrong bet.. practically every other airline suffered the same fate.

But what I'm sure, is they are primarily concerned with their shareholders' interests, and the staff are the sacificial lambs to ensure some "reasonable" dividends will still be paid out.

Click to expand...

That's why I have said "forgive them, Father!, for they do not know, what they are doing". It is a honest mistake, everybody else is doing it, and everybody else is making the same mistake.

It is a common everybody else mistake!

The purpose of hedging is to minimize the worse case senario of oil becoming unaffordable. If SIA is unable to take such a hit from falling oil prices, was it a hedge in the first place? Its like saying "I bought insurance but the premium is so high i have to declare bankrupt".
SIA speculated on oil prices and fucked it up! Way to go Harry!

halsey02 said:

It is a honest mistake, they do not know that oil prices will drop from $115 to....???, they do not know that UBS, CITI..whatever, ABC etc... will drop....they went in too early, too quickly.

But they do know how to be renumerated well for all their achivements, but not their failures...

How would they know?, how could they predict?

Strangely...in the past..they could predict?

IT IS A HONEST BUSINESS MISTAKE lah!...please forgive!, especially those, who have to take long, no pay leave..forgive please!...a honest mistake!

Click to expand...

For honest mistakes, you can be sure their top dogs there will give themselves fucking big big bonuses.

That follow the examples set by their top Master and God Lee Kuan Yew
and daugther in law and sons.






HOW ELSE DID BASTARD LEE KUAN YEW GOT FROM YOU ALL THAT 400-500++ BILLIONS INTO HIS TEMASICK AND GIC?

EVEN MORE HUNDREDS OF BILLIONS INTO HIS RESERVES




Sinkies got no balls
You all dare not stand with those that tried to speak for you.
SO HOW MANY TRIED TO SPEAK FOR YOU NOW?

You all dare not give money to them so that they can work for you.
SO HOW MANY CAN WORK FOR YOU NOW?

You all dare not support them publicly so that they can speak for you.
SO HOW MANY PUBLICLY SPEAK FOR YOU NOW?

You all turn your backs on those that spoke out bravely against LKY
LKY hit out at those who tried to speak for you with his kangaroo courts
You turn your backs and not support them with money and courage.


SO HOW MANY TRIED TO SPEAK FOR YOU NOW?
SO HOW MANY CAN WORK FOR YOU NOW?
SO HOW MANY PUBLICLY SPEAK FOR YOU NOW?


You let them be beaten and bankrupted because you all have no balls
NOW YOU GETTING YOUR BALLS CUT OFF FROM YOU AND YOU AND YOUR FAMILY RAPED AND FUCKED BY LEE KUAN YEW AND HIS COCKROACHES IN WHITE


Why complain now?

Your 400-500++ billions sucked and bled into LKY Temasick and GIC

And even more billions are currently sucked and bled so that LKY can use those money to bastardised and pay his kangaroo courts and running dogs to bleed even more billions from you in future

You got what you all deserved
for your lack of balls

Harry Lee said:

UOB-Kay Hian sees SIA reporting $2.1b hedging loss

SO that's why the poor Singaporean SIA staff now has to pay the price of someone's folly.......

Actually, the ones who made bad management decisions should pay the price....but then, who is there to enforce it? Who can sack the Board?

I say, even the Minister in chraged may not be aware of what is happening in the National Airline.

But then, SIA had always been Harry's baby....

Click to expand...

SIA also want passengers travelling on Harry's Airline to pay for their hedging losses in the form of INCREASED AIRFARES at the height of a major recession in the arrogant belief that SIA is the only airline in the world.

Being a National Carrier of SG, SIA should be offering promotional offers to beat all competitor airlines to lure more tourists to Singapore as part of an overall STB strategy to boost business to the retail/F&B/hotel industries reeling in the recession.

Comparing airfares serving the NZ/SG sector; SIA return fare (>$2000), Royal Brunei ($1200), Qantas ($1700). SIA CEO should be SACKED and not given any golden parachutes or golden handshakes or stock options.