What’s causing SIA’s load factors to unexpectedly soar?

Load factors are on their fifth month of improvement.

Singapore’s flag carrier has recently been exceeding expectations in terms of load factors, turning even pessimistic analysts into believers.

According to analysts from UOB Kay Hian, their previous expectation of a 0.2ppt decrease in load factor for 2016 has been changed into a 0.6ppt increase on back of rising traffic.

UOB Kay Hian says codeshares, two or more airlines sharing the same flight, are likely behind this spike, finally bearing fruit.

UOB Kay Hian adds that active capacity management also played a part in the improvement.

Improving load factors are a good sign for Singapore Airlines, as every 1ppt improvement in load factor is expected to raise net profit by approximately $50m.

“Parent SIA’s pax load factor improved 3.1ppt in November, with stronger loads across all regions. The greatest load factor improvement was in long-haul routes, to West Asia, Africa, Southwest Pacific, Europe and the US,” UOB Kay Hian said.