Here’s why SIA is hoping for an Australian dollar rebound to revive its anemic loads

Australia is SIA’s largest market by seat capacity.

Singapore’s flag carrier is on the wrong side of the weakening Australian dollar, the country being an important source market for Singapore Airlines.

According to a report by UOB Kay Hian, the A$ has weakened by about 3.2% against S$ ytd. Australia is SIA’s largest market by seat capacity in km-terms, accounting for 17% of SIA’s total capacity.

“The sector has a relatively higher portion of premium traffic and lower loads could thus impact yields adversely,” UOB Kay Hian noted.

Meanwhile, UOB Kay Hian said recent codeshares and partnerships are likely to improve SIA’s ability to compete with other carriers, but are unlikely to be earnings accretive in the near term.