Singapore Airlines

SIA re-purchased 500,000 shares @ $14.2014 yesterday. This totals to over $7 million which is merely a drop in their $5 billion net cash position. I would expect more share buy-backs if SIA cannot identify any attractive acquisitions.

Since i wrote about them, here's a look at the "hottest" stewardesses at a Biz Travels & Meetings Show survey. The Singapore Girl is 2nd, a fair distant 2nd.
http://www.relax.com.sg/relax/media/5547...esses.html

(13-02-2011, 03:47 PM)mikh Wrote: Since i wrote about them, here's a look at the "hottest" stewardesses at a Biz Travels & Meetings Show survey. The Singapore Girl is 2nd, a fair distant 2nd.
http://www.relax.com.sg/relax/media/5547...esses.html

Virgin Atlantic (the winner) is 49% owned by SIA LOL

Though, overall, the poll is quite meaningless since we don't know the sample size, the polling method and where the voters came from.

(Not Vested)

actually, i was a little surprised at 2nd.
On the link it does say "53 per cent of 1000 travellers at the Business Travel and Meetings Show in London voted (VA) them as the most attractive..". Yes, agree polling method could be perhaps be questioned. True, forgot that SIA has that stake in VA.

News regarding dissatisfaction of pilots pay again...

Actually, I cannot still quite understand how is it that this particular group of specialists can hold so much power by threatening strikes when they feel they are not paid adequately, especially when they are already paid much more than most other professions.

Are these people especially talented to expect they do not need to abide by the same economics binding other professions? I remember hearing this same class of profession exploiting certain terms in certain insurance, such that plans were subsequently excluded from pilots. Can't remember the exact details though.

Pay cuts loom, so older SIA pilots may bail out
Union says they could seek fresh pastures if airline proceeds with cuts

By VEN SREENIVASAN

(SINGAPORE) Singapore Airlines and its pilots could find themselves in the courts again if they can't resolve the issue of salaries for pilots who are rehired after retiring.


Senior pilots can earn over $20,000, excluding flying allowance, by the time they reach retirement. And under the original SIA proposal, they would take a pay cut of some $8,000 on being rehired.

This offer was rejected outright by Airline Pilots Association-Singapore or Alpa-S. But after four rounds of talks since November last year, the two sides have moved closer on their positions.

SIA has accepted the Ministry of Manpower's proposal to use the 'effective mid-point' of the pilots' salary band as the base salary for rehired pilots. This is quite a move away from SIA's earlier position that pilots rehired after retirement at 62 would be paid a basic starting salary of a fresh pilot, but earn full flying allowance.

So far, the union has yet to accept the revised offer from SIA.

Alpa-S president Captain P James said the take-home package for rehired pilots would still be lower than what the company pays a fresh expatriate pilot, which works out to just over $15,000, including gratuity and housing allowance. He also explained that there were critical points of principle involved.

'We can understand the need to be cost-competitive and adjust the salaries of older pilots, but how do you justify the quantum of cut being proposed for a fully qualified and fit pilot at 62?' he asked.

Under the existing rules of the International Civil Aviation Organisation (Icao), pilots have to give up their wings at 62. But subject to medical checks, they can be rehired by their airlines. In SIA's case, they would undergo two annual medical tests, four flight simulation sessions per year and undergo in-flight line checks to keep their wings.

The problem for the Alpa-S is that its pilots are not included in the Tripartite Guidelines on Re-employment of Older Workers. This document, released last March, would require all companies to rehire workers who reach retirement in 2012 for a period of three years.

Also, the current Collective Agreement between the pilots and SIA gives the company full discretion on terms and conditions for rehiring of retired pilots.

Alpa-S is also unhappy with the company's decision to cut pilots' salaries by 10 per cent once he/she hits 60 years of age.

'Does the pilot become less productive or knowledgeable the day he turns one day older?' asked Cpt James.

Alpa-S said it fears that such policies could prompt pilots to start looking around for new pastures elsewhere before they reach 60.

'We could get into a situation where pilots who are in their mid-50s start thinking about moving because their career runways at SIA are getting shorter,' Cpt James said. 'They know that once they turn 60, they become less marketable. This would be a big loss as these are professionals who were trained by SIA, and have over 20 years track record here.'

He added that many Tier 1 global carriers around the world rehire retired pilots with long track records and in good health.

'While SIA has enough pilots to cope with its existing requirements, a pick-up in the industry and the arrival of more new planes into the fleet could change this equation,' Cpt James added.

Still, the company insists it is prepared to continue discussions with Alpa-S.

'Singapore Airlines remains committed to re-employment,' said spokesman Nicholas Ionides. 'In 2010, SIA concluded re-employment agreements with AESU and SIASU, our unions representing administrative officers and general staff, respectively. SIA remains keen to continue discussions with Alpa-S to reach an agreement.'

The question is whether this will be enough to keep the issue from ending up in the Industrial Arbitration Court.

If it does, this would be the second time in about three years that the courts would be asked to rule on a dispute between the two parties. The last time, they faced off on the pay-scale increase for A380 pilots, with the court ultimately offering a compromise solution.

Relations between SIA and its pilots have been turbulent, with the worst patch in 2003 when the Sars crisis led to pay cuts. But labour-management ties improved considerably after intervention by then-Senior Minister Lee Kuan Yew. Over the years, there have been bouts of fresh disputes, but both sides have ultimately managed to resolve their differences.

Only 20 years experience and they're considered indispensable? What about the 40+ years of experience guys in my company... Haha...

SIA announces $1.09 billion FY profit and declares a total of $1.20 dividend per share which includes $0.80 special dividend. SIA has already paid out $0.20 interim dividend and this brings the full year dividend to $1.40 per share.

(12-05-2011, 06:30 PM)Nick Wrote: SIA announces $1.09 billion FY profit and declares a total of $1.20 dividend per share which includes $0.80 special dividend. SIA has already paid out $0.20 interim dividend and this brings the full year dividend to $1.40 per share.

Wow, smart! They suck up the special dividend from SIA Engineering then declare their own special dividend of 80 cents/share.

Some simple calculation

SIA Engineering market cap = 4.6b
@ 80.39% = 3.7B
NPAT = 0.26B
@ 80.39% = 0.21B
NBV = 1.3B
@80.39% = 1B
Total dividends = 0.33B
@80.39% = 0.26B

SIA market cap = 17.1B
NPAT = 1.1B
NBV = 14.2B
Total dividends = 1.7B

SIA less SIA engineering
SIA market cap = 17.1 - 3.7 = 13.4B
NPAT = 1.1 - 0.26 = 0.84B
NBV = 14.2 - 1 = 13.2B
Total dividends = 1.7 - 0.26 = 1.44B

SIA Engineering is way more profitable with ROE @ 20% while SIA(ex Sia engineering) @ 6%
SIA Engineering is trading at 3.5X NBV while SIA(Ex Sia Engineering) @ 1XNBV

I don't know them well but by looking at the number,
1) I would say having a brand doesn't make sense (properly it really doesn't for airline)
2) The market is giving Sia Engineering lot of respect(high valuation) but not SIA
2) If Sia Engineering is a good buy, then SIA is even a better buy because one can get 80% of Sia Engineering and paying <NBV for SIA(if Sia Engineering worth more than current price)

Business Times - 13 May 2011

Strong SIA gains yield hefty dividend

Profit quintuples to $1b; special payout of 80cents proposed

By VEN SREENIVASAN

(SINGAPORE) Singapore Airlines (SIA) sprang a surprise yesterday by declaring that it would pay a handsome dividend of $1.20 per share after raising full-year profit to $1.09 billion from $215.8 million a year earlier.

The bottom line for the year ended March 2011, minority interest included, came to $1.15 billion, below analyst forecasts of about $1.3 billion.

The profit rebound was achieved despite a 24 per cent rise in its fuel bill for the year, and fines totalling $202 million on SIA Cargo by the United States Department of Justice Antitrust Division, European Commission and the South Korean Fair Trade Commission.

Revenue grew 14 per cent to $14.53 billion as both carriage and yields recovered from depressed levels of the previous financial year.

The company declared a final dividend of 40 cents, plus a special dividend of 80 cents. This was on top of an interim dividend of 20 cents paid at the end of last year, taking the total payout to $1.40 per share.

Despite a strong year, the final January-March quarter was a tough one.

A sharp rise in fuel cost and other expenditures saw attributable profit fall to $171 million, down from $278 million a year earlier. Revenue rose to $3.59 billion, from $3.34 billion.

In that three months, expenditure rose by $326 million or 11 per cent, mainly due to a $300 million rise in jet fuel bill as fuel prices spiked 34 per cent year on year. But this was partially offset by hedging gains of $38 million, versus hedging losses of $19 million a year earlier.

At the company level, SIA reported an operating profit of $851 million for the year, representing a turnaround from an operating loss of $39 million for the previous year.

The group's 80 per cent-owned subsidiary SIA Engineering's operating profit contribution came to $136 million (versus $110 million for 2009-10); SIA Cargo posted operating profit of $151 million (turning around from a $145 million loss); while SilkAir's operating profit surged to $121 million ($49 million previously).

The result translated to a full-year earnings per share of 91.4 cents, up from 18.2 cents for 2009/10.

The company was also sitting pretty on some $7.43 billion in cash at end-March, up from $4.47 billion a year earlier.

In the January-March quarter, SIA decommissioned one B747-400 aircraft. And as at end-March, its operating fleet comprised 108 passenger aircraft - seven B747-400s, 67 B777s, 19 A330-300s, 11 A380-800s and five A340-500s - with an average age of six years and three months.

But the airline expects a challenging year ahead.

'The uncertain global economic outlook is manifested by the recent Standard & Poor's downgrade of the US debt outlook from stable to negative, and continual fears of a sovereign debt crisis in Europe,' it said in a statement.

'In addition, the concerns over nuclear radiation in Japan following the March 11 earthquake continue to impact air traffic to and from Japan. These effects are reflected in forward bookings, indicating near-term weakness in load factors.'

Meanwhile, it noted that average price of jet fuel had surged by more than 25 per cent this year to US$140 per barrel - the highest level since the last peak at US$174 per barrel in July 2008.

'While there has been some respite in the past week, jet fuel prices are likely to remain high and volatile in the near term,' SIA said. 'The twin challenges of near term weakness in load factors and high fuel prices will adversely affect operating performance of airlines.'