SIA’s glory days are over

SIA’s future seems bleak. And we shouldn’t just blame Covid-19 for SIA’s woes. Investors in SIA should question why Goh continues to be CEO after having destroyed billions in shareholder value.

Phillip Ang

* The author blogs at LikeDatOsoCanMeh.

 

 

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26 Responses to “SIA’s glory days are over”

  • patriot of TUMASIK:

    NOT their money what!!!…so the Jinx says: “why worry be like me wear the Pants in the House and leave the pink panty for him to match his SHIRT in Public to remind him ‘Who is The BOSS’…that’s me the one wearing the PANTS”

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  • TL Tan:

    While trying to bash our government, the writer is undermining our national icon. It is true that SIA was having a difficult time even before COVID-19, but this was due to the intense competition in the airline industry, especially among budget airlines. The other factor affecting SIA was that fewer top executives were flying 1st Class – Business Class was deemed sufficiently luxurious for them. These are all global trends affecting the airline industry, nothing to do with SIA management. On the contrary, SIA will emerge from the crisis even stronger due to Temasek’s backing. It is the small budget airlines that will go out of business. Therefore, SIA’s current share price of $6 is grossly undervaluing the company. By 2021, when COVID-19 has passed, expect SIA to be trading at $10-12 per share once again.

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  • SIA is keeping wrong model:

    until late 2007, most companies were laxed with spending S$ on air tickets. for most working folks then, an SIA business class is almost a given.

    so much so until then SIA was able to charge premium fares on all flights originating out of pap Singapore. it prompted SIA to maximize S$ per business class seat by reducing the number of seats per row, from the normal 2-3-2 to 1-2-1. SIA priced the space wise more spacious seats at more than twice what others charged.

    as an example, business class on Thai Airways to USA was about S$3k+ whereas SIA was charging S$8k+.

    then came 2008 crash. then companies started to tighten the air tickets belt. most go cattle class, including senior management. some categorically writes it as a policy no business class on SIA if same class is available on another airline.

    almost at the same time, in order to make life sweeter for then pap lky, SIA introduced the suites on the A380. which today are mostly vacant. but SIA continued to pursue this ultra profit model, by reducing seats even in suites to current 12 per aircraft. mostly empty too nowadays.

    THEREFORE, anyone in the know already knows SIA was wrong in the seat model. this is soon after 2008 and long before Wuhan virus. the Wuhan virus is just the final nail to the SIA coffin.

    many say temasick is making a fool of small investors by giving SIA the high price of S$3 each. when actual is about S$1.76, temasick thinks small investors can accept the brand name goodwill at S$1.24 each. based on most coffee shop ah peks and ah sohs who know better, they can offer up to S$1.60 for each based on current situation and if situation gets worse, they think even S$1.60 for each is high risk since final breakup value may be even less than S$0.48 each.

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  • TUCK WAN:

    SHIPS SINK and AEROPLANES GO OFF THE RADAR.
    Story of a General & a scholar. End of story.

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  • MarBowling:

    SIA is Lee Kayu’s CLOWN JEWEL! Knowing the dire straits SIA is experiencing now, he must be turning upside down in his grave oops urn at Mandai. What do you think?

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  • Asd:

    I think the board of directors should be retrenched because they have no solution yet drawing fat salary they should go use their skill future to up skill

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  • Lie Con U:

    LHL himself is incompetent, he and his team still could not control the Coronavirus epidemic. The tide is turning now there is community spread. The present team who is fighting the epidemic SHOULD STEP DOWN! Singaporeans are seeing how incompetent they are.
    If LKY was still at the helm HEADS WOULD HAVE ROLLED.LHL is A WHIMP,A WEAK LEADER.He surrounds himself with yes man and paper general who have nothing real to show than their fat salaries and their fancy titles.
    SIA is going the way of NOL.

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  • Lucky Phillip did not say SIA uses gahment money directly or else TRE and he will kenna POFMA liao.

    https://www.gov.sg/article/factually-clarifications-on-falsehoods-about-resilience-budget

    Mod: The [email protected] uses common sense and we all know that whatever money going into SIA would be from Temasek, no possibility of Phillip’s article being published if he had made such a claim.

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  • oxygen:

    ANYONE HEARD OF HOLLOW LOG ACCOUNTING in hiding funds circulation and transfer?

    Go google “hollow log” meaning. it reads.

    “a fund in which undisclosed assets are held for future use, especially by a government department or other statutory authority”.

    And if still can’t find it, here is an example and weblink.

    Coalition’s surplus claims sunk by attack on ‘hollow log’

    https://www.theaustralian.com.au/national-affairs/coalitions-surplus-claims-sunk-by-attack-on-hollow-log/news-story/b016d748f3a3fd2f6ed36b6ab846fd45

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  • Confused:

    The bunch of idiot did not learn from mistakes. They should have had used their Skill Future Fund and upgrade themselves.

    Remember Hyflux. They have too much loan and it is like having a mill-stone on their neck and that break the camel back.
    NOL gone. Hyflux gone and now another on the list…Well done to the multi million paid idiots.

    For those who still want to pick them during this GE. Our last prayer for you.

    Covid 19 also failed to control and yet praised themselves.

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  • oxygen:

    IF TEMASEK IS PAYING $3 per share for the SIA’s capital raising, that is what its valuation says of the MAXIMUM current worth of SIA shares.

    If the coronavirus pandemic does NOT gets under control and recover from this point, I WON’T even pay $3 per share since SIA, like all other airlines, is GOING TO PAY FOR MASSIVE LOSSES FORWARD AND ASSET WRITE-OFF INEVITABLE.

    Who else pay higher and how much higher than the rights price of $3 is IRRELEVANT TO MY INVESTING CALCULUS.

    I PLAY THE “INVESTING” CASINO TO WIN, not to rescue ambulance stock or worst still funeral stock tipping over into bankruptcy – anywhere.

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  • Phillip Ang:

    TL Tan:
    While trying to bash our government, the writer is undermining our national icon. It is true that SIA was having a difficult time even before COVID-19, but this was due to the intense competition in the airline industry, especially among budget airlines. The other factor affecting SIA was that fewer top executives were flying 1st Class – Business Class was deemed sufficiently luxurious for them. These are all global trends affecting the airline industry, nothing to do with SIA management. On the contrary, SIA will emerge from the crisis even stronger due to Temasek’s backing. It is the small budget airlines that will go out of business. Therefore, SIA’s current share price of $6 is grossly undervaluing the company. By 2021, when COVID-19 has passed, expect SIA to be trading at $10-12 per share once again.

    Thanks for the joke.

    If SIA was well managed and had a competent CEO, its share price wouldn’t have collapsed to below $10.
    Former SIA scholar and CEO Goh had 9 years to experiment with his ideas. He failed shareholders.
    He had expected to attract passengers by simply paying billions to have the latest hardware.
    Trying to impress Trump in 2017, SIA committed to purchase $19 billion worth of planes.
    With expected decrease in flights and more intense competition post crisis, SIA will be saddled with billion-dollar losses in the near future.
    With NTA diluted to below $6, no idiot will pay even a cent higher.
    Grossly undervaluing the company?

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  • TruBlu:

    The SAME GAHmen MAKE SO MUCH NOISES WHEN MOOTING SOCIAL SECURITY FOR OLDER SGS MADE JOBLESS N WHO STILL HAVE TO PAY GST FOR BASIC NECCESSITIES.
    NOW THAT BUSINESSES ARE IN TROUBLE,THE SAME NOUSY GAHmen THROW TENS OF TAXPAYER MONEY AT THEM???

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  • Realistically:

    @ TL Tan:
    April 2, 2020 at 4:32 pm (Quote)

    “On the contrary, SIA will emerge from the crisis even stronger due to Temasek’s backing.”

    Hello, don’t you have any shame or embarrassment to keep on your s*ake oil propaganda?

    You know, it reflects very poorly of Ho Ching through your crap…….that she has no brain in her role as CEO of TH.

    “Temasek’s backing”? You gotta be kidding lah……..Temasek itself is in a very bad shape for its failed international investments………..that it required transfer of MAS reserves……..MOF money is more likely injected into TH…….just like in the case of an Aussie asset bought at high price around the time of the GFC.

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  • Realistically:

    @ TL Tan:
    April 2, 2020 at 4:32 pm (Quote)

    “While trying to bash our government, the writer is undermining our national icon.”

    Let’s get the FACTS.

    SIA’s controlling shareholder is Temasek…….whose CEO happens to be the WIFE of the emperor without clothes. So SIA is an extension of the government.

    “….this was due to the intense competition in the airline industry, especially among budget airlines.”

    The budget airlines saga has been around for nearly 20 years now……..you mean SIA (& Temasek) doesn’t know this? And react or adjust their needs accordingly by ordering US$19 billion of new planes? Or has the CEO of TH been sleeping or has kosong numbskull to allow SIA to hari-kiri as this must be the case because of the “intense competition…..especially among budget airlines”?

    So how does the emperor without clothes justify what is widely believed to be his wife’s enormous salary?

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  • Homeless Cat:

    TL Tan:
    While trying to bash our government, the writer is undermining our national icon. It is true that SIA was having a difficult time even before COVID-19, but this was due to the intense competition in the airline industry, especially among budget airlines. The other factor affecting SIA was that fewer top executives were flying 1st Class – Business Class was deemed sufficiently luxurious for them. These are all global trends affecting the airline industry, nothing to do with SIA management. On the contrary, SIA will emerge from the crisis even stronger due to Temasek’s backing. It is the small budget airlines that will go out of business. Therefore, SIA’s current share price of $6 is grossly undervaluing the company. By 2021, when COVID-19 has passed, expect SIA to be trading at $10-12 per share once again.

    *snrk*

    Thanks for the joke. Reality check, boy. SIA and its geound handlers cut lots of corners and outsourced services for cheap. Incompetence and idiocy set in, and now the debt comes due. It will be a LONG time before SIA returns to its former glory, by which time the incompetent, the lazy and the corrupt in their ranks have met deserved ends.

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  • TruBlu:

    COVID,more than SARS,shows the WORLD’S RICH N POWERFUL that THEY are powerless in the face of KARMA.

    GREED N SELFISHNESS N ARROGANCE ARE USELESS.
    EVEN SIA SHARES TUMBLE LIKE ALL OTHER HIGH FLYER$$$.

    I hope,after COVID subsides,RICH N POWERFOOL$$$ CAN LEARN TO BE HUMBLE N GENEROUS.

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  • A Great Way To Fry:

    Tiger Airways gone? Not viable as budget carrier?

    Globaally, airlines all done in by a virus.

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  • Peter Drucker says:

    Management is doing things right; leadership is doing the right things…. There is nothing so useless as doing efficiently that which should not be done at all.

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  • bailout:

    Expensive bailout.
    SIA staff,especially Management should take massive pay cut to justify it.
    If other not so fortunate company will be closed ..

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  • oxygen:

    @ TL Tan

    YOU REALLY IS A BUFFOON to have aired your fairytale illogic of merits of investing in SG banking stocks in another recent TRE thread.

    Here is what Moody has to say of risks of investing in SG banking stocks in the current CV pandemic.

    Moody’s cuts outlook for Singapore banks on coronavirus fallout

    https://sg.finance.yahoo.com/news/moodys-cuts-outlook-singapore-banks-061939854.html

    I TOLD YOU I WILL BUY SG BANKING STOCKS AT HALF-PRICE TO CURRENT MARKET PRICES OF THESE BANKING SHARES.

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  • oxygen:

    @ TL Tan,

    THE $15 BILLION CASH CALL might not even buy SIA’s survival. According to Business Times article read below,

    SIA cost cuts continue as S$15b from cash call must ‘last as long as possible’

    https://www.businesstimes.com.sg/companies-markets/sia-cost-cuts-continue-as-s15b-from-cash-call-must-last-as-long-as-possible.

    That tells me that SIA is staring at a lot of losses ahead which may imperil its survival.

    And that same sentiment is echoed in this “good” investing read.

    Why I’m not buying SIA shares even after Temasek promised to save it

    https://www.asiaone.com/money/why-im-not-buying-sia-shares-even-after-temasek-promised-save-it

    I DON’T HAVE ANY SIA SHARES NOW – if I had any, I would be inclined to sell them now and, maybe….depending on how heavy of losses bleeding forward…. buy back the shares BELOW SIA CASH CALL OFFER of $3 per share.

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  • good fortune and luck:

    //SIA’s glory days are over//

    aiyoh. depends lar ? as long as got backup by ah kong funds for the long term (e.g 99999 years), they are still in business lar ? that is why one need not necessarily have to be good (or smart or intelligent), one must be at the right time and place (plenty of good fortune and luck) ??

    that is why all the white idiots are talented and all the oppo are not so talented and experienced (painted as so) ???

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  • Realistically:

    ANOTHER GIC China Investment Bites the Dust

    https://www.straitstimes.com/business/companies-markets/shares-of-luckin-coffee-chinas-starbucks-rival-sink-after-probe-finds-coo

    Shares of Luckin Coffee, China’s Starbucks rival, sink after company says COO fabricated sales

    …..

    Luckin, which competes with Starbucks Corp, had been one of China’s few successful initial public offerings last year. Its investors include asset management giant Blackrock, Singapore sovereign wealth fund GIC and China International Capital Corp.

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  • Soccerbetting2:

    Reported on Straits Times website :Quote – “No need to rush to supermarkets, FairPrice stores to open ‘come what may’: Seah Kian Peng….

    Shoppers at the FairPrice supermarket in Hougang Mall on April 3, 2020.ST PHOTO: KELVIN CHNG
    PUBLISHED20 MIN AGO
    FACEBOOKWHATSAPPTWITTER
    Linette Lai
    SINGAPORE – There is no need to rush to supermarkets, as all FairPrice stores will be open “come what may”, said FairPrice group chief executive Seah Kian Peng on Friday (April 3), in response to a surge in buying at supermarkets.

    “My colleagues are doing our best. Our stores will remain open today, this weekend, next week, and so no need to worry that we will not be functioning,” he wrote in a Facebook post……

    “This adds strain to the entire system and you can expect empty shelves till more stocks are delivered from our warehouses to the stores and also replenished at the store shelves,” he added. “So please be patient, buy sensibly and also practise safe distancing.”…. “Unquote.

    Response : Singaporeans should understand that Singapore food supply chain will not failed anytime soon within the next three months. Those kiasu e*** women wing should has already stored up tons of food in their warehouses especially those evil beasts Ntuc women wing.If not, those beast PAP women wing will also died of hunger if there is no food in Singapore.

    Today afternoon time, I saw a huge buying crowds at Punggol Ang Mo supermart and everybody of the crowd are busy buying in large quantities. Those e*** women of Ang Mo supermart will be reaping tons of profits money in, no doubt. And that stupid beast Sean Kian Peng should come out with a statement to re-assurance the citizens that all food prices in supermarkets will be maintained at present value or reduce prices to create assurance that there is a lot of stocks available and such crowds will slowly disperse off when food supply are known to be plentiful and especially when prices are lowered. People will wait for more lower prices before buying, so then there will be lesser crowds. Singapore LHL should check why some items have been slowly increase in prices by up to $0.30 or so(especially in Giant) in the last few weeks. This create fear that all prices will be going up as such leading to such buying crowds.

    When pigs are imported much more in quantities recently from Indonesia, why are pork prices still superhigh and not come down? Don’t quote the unbelievable excuse reason that Australia pig import is having problem. Those evil beasts women at Bee Cheng Hiang are selling some type of Bak Kwa (barbecue pork) at exorbitant price of over $80 per Kg. When Singapore government see such problem of excessive overcharged pricing also can totally don’t care, it is just a matter of time in terms of years later that more big problems will arise later!

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  • better to invest in local:

    Better for GIC to invest in local companies and build our local talent in manufacturing,science, biomedical and IT Security etc
    Why invest in company like China Luckin Coffee ?
    How it help Singapore ?
    Maybe time to replace our Investment Team and change Focus.

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