Singapore Airlines Shares Drop After Fall in Traffic (Update1)
By Chan Sue Ling
Oct. 16 (Bloomberg) -- Singapore Airlines Ltd., the world's largest airline by market value, declined as much as 5.6 percent after passenger traffic dropped for the first time in more than three years.
The airline tumbled as much as 72 cents to S$12.20 and changed hands at S$12.22 as of 9:44 a.m. in the city. The carrier yesterday said it flew 1.5 million passengers in September, 1.6 percent lower than a year earlier. It's the first slide since February 2005, according to data compiled by Bloomberg.
Singapore Airlines filled fewer seats last month after it expanded capacity faster than demand. Business and leisure travel is cooling as the credit crisis in the U.S. worsens and financial institutions cut jobs.
``As the recession deepens, we expect further demand weakness,'' Robert Kong, a Singapore-based Citigroup Inc. analyst, said in a note dated yesterday.
Singapore Air filled 76.9 percent of its seats last month, 4.1 percentage points lower than a year earlier. That's the biggest drop since September 2004, according to Bloomberg data.
The carrier also blamed political unrest in Thailand and stricter rules for travel to China during the Olympic Games for the drop in passenger numbers. Air China Ltd. and China Eastern Airlines Corp. have said they may report nine-month losses due to visa restrictions as well as natural disasters.
Cathay Pacific Airways Ltd., Hong Kong's largest airline, posted a 0.7 percent decline in September passenger numbers, the first drop in 20 months.
Singapore Air will need to lower its planned capacity expansion to boost the proportion of seats filled and limit the ``downward pressure'' on its fares next year, Corrine Png, an analyst at JPMorgan Chase & Co., wrote in a report yesterday.
To contact the reporter on this story: Chan Sue Ling in Singapore [email protected].
Last Updated: October 15, 2008
By Chan Sue Ling
Oct. 16 (Bloomberg) -- Singapore Airlines Ltd., the world's largest airline by market value, declined as much as 5.6 percent after passenger traffic dropped for the first time in more than three years.
The airline tumbled as much as 72 cents to S$12.20 and changed hands at S$12.22 as of 9:44 a.m. in the city. The carrier yesterday said it flew 1.5 million passengers in September, 1.6 percent lower than a year earlier. It's the first slide since February 2005, according to data compiled by Bloomberg.
Singapore Airlines filled fewer seats last month after it expanded capacity faster than demand. Business and leisure travel is cooling as the credit crisis in the U.S. worsens and financial institutions cut jobs.
``As the recession deepens, we expect further demand weakness,'' Robert Kong, a Singapore-based Citigroup Inc. analyst, said in a note dated yesterday.
Singapore Air filled 76.9 percent of its seats last month, 4.1 percentage points lower than a year earlier. That's the biggest drop since September 2004, according to Bloomberg data.
The carrier also blamed political unrest in Thailand and stricter rules for travel to China during the Olympic Games for the drop in passenger numbers. Air China Ltd. and China Eastern Airlines Corp. have said they may report nine-month losses due to visa restrictions as well as natural disasters.
Cathay Pacific Airways Ltd., Hong Kong's largest airline, posted a 0.7 percent decline in September passenger numbers, the first drop in 20 months.
Singapore Air will need to lower its planned capacity expansion to boost the proportion of seats filled and limit the ``downward pressure'' on its fares next year, Corrine Png, an analyst at JPMorgan Chase & Co., wrote in a report yesterday.
To contact the reporter on this story: Chan Sue Ling in Singapore [email protected].
Last Updated: October 15, 2008
