Tan and Lim see more meaningful volume recovery in 2H2023, given time lag for airlines to ramp up China-Singapore routes as well as the recent assumption of foreign visa issuance in China.
Although SIA Engineering Company (SIAEC) (SGX:S59
) is expected to enjoy the further recovery in flight volumes, CGS-CIMB Research analysts Kenneth Tan and Lim Siew Kee believe that its profitability in the near-term is unlikely to return to pre-pandemic levels, given high staff costs.
Citing data from Centre for Aviation, the analysts highlight that flight movements out of Singapore stood at 82% of pre-Covid-19 levels on Apr 2 while June forward flight movements indicate that volumes could recover to 86% of pre-Covid-19 levels by the end of the month.
