How should Singapore bail out SIA?

[Chase]

The crash of the aviation industry affected Singapore airlines but it is not the sole reason that ruined them. Shutting down passenger operations reduces much of their variable costs and their air cargo business is still viable.

If SIA is a bus company, it also likes to buy-sell buses because they enjoyed <2%pa financing. Doing so in the past, gave SIA a youthful fleet and high-resale value for their planes. However, this bus company is now facing over capacity in the industry and new buses are likely to be cheaper than old buses.

This time, analysts are projecting SIA to lose $1.2 billion. (I suspect higher) Bear in mind that depreciation of current fleet and loss of passenger traffic will not cost them $3m loss/day. SIA is also like a bus company that speculates in oil futures. If you are on the wrong side, you bet $1, may lose $5 if you don't unwind your positions. In the past, when SIA bet wrongly, they can jolly-well charge a higher fare to passengers. This time, nobody expects oil to crash below US$22. They certainly lost a lot more than the amount they bet if they delayed the unwinding of their positions.

I believe Singapore will bail out them eventually because of national pride. However, there is more economic sense for SIA to go bust and restructure the debts before Singapore bails them out. Will we use our brains or hearts to save SIA?

Reference -
SIA bets on oil prices going up as it extends fuel hedging
https://www.straitstimes.com/business/sia-bets-on-oil-prices-going-up-as-it-extends-fuel-hedging

 

[GOD IS MY DOG]

hope and pray SIA will collapse.................more people will regain their political freedom to vote for Oppo

 

[syed putra]

By the time this virus pass, oil may go up to usd40 so the losses won't be so bad.
Besides, economy may suddenly restart with enthusiasm causing a shortage of oil. Who knows?

 

[Chase]

10000 SIA staff goes on unpaid leave
https://www.hcamag.com/asia/news/general/10000-sia-staff-to-go-on-unpaid-leave/217813

 

[LaoTze]

10000 SIA staff goes on unpaid leave
https://www.hcamag.com/asia/news/general/10000-sia-staff-to-go-on-unpaid-leave/217813

And they keep their condos and makan makan at restaurants and Gucci bags and cars and Rolek watches and YSL and Kate Spades
all given free to them hor?
Or their loving MPs and maggots maggotess pay for them all hor!

Forward this on your WhatsApp and make this go viral.
Get this onto the handphones of all in Singapore

VOTE OUT ALL THE MAGGOTS AND MAGGOTESS IN WHITE AND TURN STINKAPORE BACK INTO SINGAPORE
OR OUR KIDS END UP BECOMING SECURITY GUARDS TO BE KICKED IN FACE BY CECAs OR PANDA FOOD DELIVERIES OR PICKING UP CARDBOARDS OR SELLING TISSUE PAPER IN HAWKER CENTERS

And why Stinkapore got the GOLD Standard for wuhan control?

 

[krafty]

The crash of the aviation industry affected Singapore airlines but it is not the sole reason that ruined them. Shutting down passenger operations reduces much of their variable costs and their air cargo business is still viable.

If SIA is a bus company, it also likes to buy-sell buses because they enjoyed <2%pa financing. Doing so in the past, gave SIA a youthful fleet and high-resale value for their planes. However, this bus company is now facing over capacity in the industry and new buses are likely to be cheaper than old buses.

This time, analysts are projecting SIA to lose $1.2 billion. (I suspect higher) Bear in mind that depreciation of current fleet and loss of passenger traffic will not cost them $3m loss/day. SIA is also like a bus company that speculates in oil futures. If you are on the wrong side, you bet $1, may lose $5 if you don't unwind your positions. In the past, when SIA bet wrongly, they can jolly-well charge a higher fare to passengers. This time, nobody expects oil to crash below US$22. They certainly lost a lot more than the amount they bet if they delayed the unwinding of their positions.

I believe Singapore will bail out them eventually because of national pride. However, there is more economic sense for SIA to go bust and restructure the debts before Singapore bails them out. Will we use our brains or hearts to save SIA?

Reference -
SIA bets on oil prices going up as it extends fuel hedging
https://www.straitstimes.com/business/sia-bets-on-oil-prices-going-up-as-it-extends-fuel-hedging

when i read this piece of news, i really face palm! it's no secret oil price is rigged and many pple out there already known how it was being manipulated, the gang at SIA still stupidly go and hedge the oil price. they should be fired! now, i can roughly know why s'pore cannot survive in long term. even lky says joining back to matland is possible.

 

[knowwhatyouwantinlife]

when i read this piece of news, i really face palm! it's no secret oil price is rigged and many pple out there already known how it was being manipulated, the gang at SIA still stupidly go and hedge the oil price. they should be fired! now, i can roughly know why s'pore cannot survive in long term. even lky says joining back to matland is possible.

When they did their hedging at $76 oil was probably $60...then putin slapped the shieks and corona came to party..benefits of hindsight again eh

 

[Chase]

when i read this piece of news, i really face palm! it's no secret oil price is rigged and many pple out there already known how it was being manipulated, the gang at SIA still stupidly go and hedge the oil price. they should be fired! now, i can roughly know why s'pore cannot survive in long term. even lky says joining back to matland is possible.

Hedging is not uncommon among airlines. Some like Hainan Airlines don't hedge so they can offer very cheap airfares when oil prices are low. Some like SIA hedges, so that when oil prices are high, they can make more money, or let the passengers absorb their losses when oil prices are low. Now, the sudden collapse of oil will exponentially increase their losses from hedging and unable to pass on the losses to passengers because they stopped flying.

 

[cocobobo]

CEO and kakis have to march to hoching's office for hairdrying.

5 years hedge is very bold.

 

[Thick Face Black Heart]

Gst will be raised to cover their losses. Don't worry the G has their backs.

 

[garlic]

Every airline hedge against oil prices... every airline would have suffered losses when oil price drops and this time even worse with USD at record high. Don't buy any airline stocks yet, the details of the bailout are not clear and it is only to ensure survival of the airlines, shareholders' value are at risk. For example, the bailout will almost include a dividends freeze, that is to say there will be no dividends paid out till all the loans are repaid. Air NZ even retracted their dividends which they already announced early this year and which was to be paid out this month, gone.. the dividends.
Secondly, the loan will almost also carry with it the option to convert them to shares at lower-than-current prices, which when exercised will severely impact stock value. Wait and see first... but hedging against oil price is an industry-wide practice, nothing new... and most would have suffered this time.

 

[Chase]

Every airline hedge against oil prices... every airline would have suffered losses when oil price drops and this time even worse with USD at record high. Don't buy any airline stocks yet, the details of the bailout are not clear and it is only to ensure survival of the airlines, shareholders' value are at risk. For example, the bailout will almost include a dividends freeze, that is to say there will be no dividends paid out till all the loans are repaid. Air NZ even retracted their dividends which they already announced early this year and which was to be paid out this month, gone.. the dividends.
Secondly, the loan will almost also carry with it the option to convert them to shares at lower-than-current prices, which when exercised will severely impact stock value. Wait and see first... but hedging against oil price is an industry-wide practice, nothing new... and most would have suffered this time.

Yes, if you want to buy, wait till temasek goes in first, eg. rights-issue to raise funds for SIA.
check the discount on rights issue.

 

[Chase]

Reuters: SIA Trading Halt
https://www.reuters.com/article/hea...ts-trading-pending-announcement-idUSL4N2BJ05F

 

[Chase]

SIA having orgasm now with massive Temasek bailout.

SIA aims to raise $15 billion with support from Temasek
https://www.straitstimes.com/singap...-major-financial-challenges-posed-by-covid-19

 

[Chase]

equals to $5000 from every eligible voter

 

[red amoeba]

Any SIA Stewardess part timing on FL dome to tide over this period ?

 

[Chase]

Any SIA Stewardess part timing on FL dome to tide over this period ?

Rightfully 75% of their pay are now reimbursed by government, they shouldn't be freelancing.

 

[Chase]

SIA needs to cum clean their outstanding futures position because our country helps them.

For example, assume oil is $20 now
if oil is US$10, their losses will be doubled from now.
If oil is US$30, their losses will be half from now

 

[whoami]

5.98....down 0.52..... Chialat...

 

[Chase]

Poor DBS offering another $4 billion bridge loan facility to SIA


at least one-third will be used.
https://www.straitstimes.com/busine...ng-to-banks-drawing-on-new-swap-line-with-fed