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The common denominator which underpinned the CAG-SIA-SIAEC-SATS moderate success, for the most part, has been the disciplined leadership and labour.
But the airline business today is vastly different from a decade ago. And SIA's share price (before covid), reflects that.
Up north, you have a strong airline held back by a less than cooperative and efficient airport.
SIA will survive. But even after the covid dust has settled, its operating environment will continue to be more challenging than before.
As mentioned by mobo in another thread, the weakness of Singapore's GLC business leaders is apparent when they are pitted against global competitors.
I think Sim Wong Hoo remains the only Singaporean to have created a globally competitive product for a global market.
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Using tax-payers money to bail out a company, national icon or otherwise, risks moral hazard.
A large portion of SIA losses comes from hedging of jet fuel. It is not completely "through no fault of its own" as BT column suggests.
SIA needs help to tide it over in this difficult time. But a complete bailout may not be desirable.
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(23-03-2020, 05:30 PM)brattzz Wrote: Gut feel is that SIA will have to do a rights issues at $3? and temasek will mop up all the rights.
It's too big to fail sir! :O :O :O
DBS did a rights issue in 2008/09 too at $8.++! "from a position of strength" statement i remember!
If the rights is at $1, it would be good
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24-03-2020, 01:24 AM
(This post was last modified: 24-03-2020, 01:32 AM by specuvestor.)
@karlmarx Indeed the industry had changed quite a bit in the last decade. See my posts 4 & 7 years ago
You are probably the first person I heard using the term “strong airline” with ref to MAS. It’s like saying Proton is a strong car. Or maybe you referring to AirAsia
SIA had been an industry leader. It’s not just Creative Tech. Jack ups starting from Promet was also renowned globally but in very specialised industry. Trek2000 invented the USB thumb drive. Our banks are currently larger than the Swiss banks in market cap.
But I do agree in general entrepreneurs we are not. But we’re regional leader in systems, logistics, legal and financial services, etc
(29-07-2016, 12:28 PM)specuvestor Wrote: SIA competitiveness continues to erode... even Cathay is not spared now. Until SIA Total Recall what was their edge in the first place
"(Bloomberg) --
Asia’s marquee airlines are warning tougher competition is squeezing them.
Singapore Airlines Ltd. said Thursday passenger yields -- a key measure of profitability in the industry -- remain under pressure amid "aggressive capacity injection." Yields declined to their lowest in more than six years in the first quarter. The stock fell 1.6 percent at the start of trading in Singapore Friday.
Earlier this month, Ivan Chu, chief executive officer of Cathay Pacific Airways Ltd., which dominates the Hong Kong financial hub, said there is “intense pressure" on the metric.
The expansion of the Middle East’s ‘Big Three’ -- Emirates, Etihad Airways and Qatar Airways -- and an unprecedented surge by budget airlines in the region is hurting the pricing power of Asian carriers. Singapore Air CEO Goh Choon Phong and his Cathay counterpart Chu have ordered some $20 billion in new aircraft to modernize their fleet and take on their competitors who are offering luxuries like on-board shower and butlers."
(21-10-2014, 08:18 AM)specuvestor Wrote: (19-10-2014, 11:36 AM)kagemusha Wrote: Patiently waiting for Open Skies to be in effect.... I think this is also what SIA is waiting for.
Think about it, this is a temporary setback. SIA in the first place should not even be this successful.
We have no domestic destination at all. With the Open Skies agreement, SIA suddenly has alot more destinations to fly to.
A whole host of "domestic" market now.
I hope I am right...slightly optimistic
Yes and no. I don't think this is temporary. SIA was successful because they focused on software and value proposition, when competitors were focusing on cost. Now it's about hardware and bragging rights.
Until management "total recall" they are in service industry, and not just short term reactive or bottomline, I would steer clear of their cluelessness. It is scary when management does not understand their real business or strategic purpose. The frustrating part is that they are strategic to our tourism industry so their cluelessness has extended reach
We are in the phase where Buffett said sooner or later an idiot will run the company. But like I said before, unlike Buffett I won't bet on the moat.
(18-09-2014, 02:23 PM)specuvestor Wrote: Probably instructive to reread our discussion 20 months ago and see in real time how management missteps can take years to grind a good company into mediocrity
http://www.valuebuddies.com/thread-261-p...l#pid46224
Time is the friend of the wonderful company, the enemy of the mediocre. I do hope for Singapore's sake they get better calibre management that understands what our formula was.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
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(24-03-2020, 01:24 AM)specuvestor Wrote: But I do agree in general entrepreneurs we are not. But we’re regional leader in systems, logistics, legal and financial services, etc
Our strength are in processes and efficiency. This gives us an leg up compared to regional countries and we have the smart and brilliant people to make that happen. But i see that as the "singapore glass ceiling". To be true world beaters, it will require a combination of smarts and risk taking.
You can count on the greed of man for the next recession to happen.
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24-03-2020, 08:01 AM
(This post was last modified: 24-03-2020, 08:05 AM by weijian.)
(24-03-2020, 01:24 AM)specuvestor Wrote: @karlmarx Indeed the industry had changed quite a bit in the last decade. See my posts 4 & 7 years ago
You are probably the first person I heard using the term “strong airline” with ref to MAS. It’s like saying Proton is a strong car. Or maybe you referring to AirAsia
SIA had been an industry leader. It’s not just Creative Tech. Jack ups starting from Promet was also renowned globally but in very specialised industry. Trek2000 invented the USB thumb drive. Our banks are currently larger than the Swiss banks in market cap.
But I do agree in general entrepreneurs we are not. But we’re regional leader in systems, logistics, legal and financial services, etc
Thought the inventor of the humble thumbdrive was Datuk Pua, a Malaysian?
Ok, i didn't know that after nasi lemak, chicken rice, sambal and hawker food, now there is another "I am first" that needs resolution...
I think Karlmarx is probably referring to AirAsia in the earlier post. This is because some time back, when AirAsia started to enter into the new airport KLIA2, there were alot of problems (leaking roofs, ponding runways etc). There was alot of to-fro between the biggest customer (AirAsia) and the Airport Authorities. When all the new building issues de-escalated, then both of them started to quarrel about the airport's name. The Authorities wanted to call it KLIA2 but AirAsia said it was a LCCT (Low Cost Carrier Terminal) - Well, AirAsia ain't that dumb to know about branding and probably just wanted to poke back at the Authorities. The last time I read, Airasia insisted on collecting the original charges when all PSC were normalized across the Malaysian airports since KLIA was effectively a LCCT, and both went to court.
@karlmarx, it looks like MAS will be bailed out in time to come. It probably wouldn't have happened during Tun M's time but with over 100k workers/suppliers' livelihood at stake and the fact that everyone is going to do some sort of bailout for their airlines, it is politically unthinkable if you don't do so. The bailout of MAS probably will do good for AirAsia. It is simply easier to always win over your "older weaker brother who depends on your dad for handouts" and pretend that there is no monopoly on paper, when effectively it is a monopoly over your weaker brother in practice. What Sugar King Kuok said to Najib's dad in the office that day, continues to ring true as an absolute truth.
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24-03-2020, 08:20 AM
(This post was last modified: 24-03-2020, 08:26 AM by karlmarx.)
(24-03-2020, 07:57 AM)LionFlyer Wrote: (24-03-2020, 01:24 AM)specuvestor Wrote: But I do agree in general entrepreneurs we are not. But we’re regional leader in systems, logistics, legal and financial services, etc
Our strength are in processes and efficiency. This gives us an leg up compared to regional countries and we have the smart and brilliant people to make that happen. But i see that as the "singapore glass ceiling". To be true world beaters, it will require a combination of smarts and risk taking.
This is correct. All that emphasis in science, mathematics, and not breaking the rules makes for very capable process engineers.
But others have been catching up on this.
Look at how far Airport of Thailand has come in managing scale, improving throughput, and service. In the next decade, as they continue to develop their MRO capabilities, Bangkok will probably be a strong rival air traffic hub for SEA.
The only strong advantage Singapore has against rival air traffic hubs in SEA is RWS and MBS. It is almost impossible to have a casino in Thailand or Indonesia. The only other SEA country to have a casino is possibly Vietnam, but they are still very far away in terms of infrastructure.
@weijian Yes, reference was made to AirAsia. They have done swimmingly in capturing the emerging air passenger market in SEA. AirAsia will only get more customers, as the able-to-travel population grows. This is a very large and still growing market which SIA/Scoot is highly unlikely to get (back).
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Can't agree more with specuvestor. Airliners are strategic assets, that is why countries all over the world have a stake in their national airline. Doing so gives the government control over which region of the country they want to develop and which part of the globe they want to stay connected to.
Most likely SIA will not go bankrupt, as it is a strategic asset for the country. As mentioned by various VBs, most likely there will be a rights issue, and SIA minority shareholders will have to do national service, similar to China's big 4 banks.
From my recollection, Henn Tan invented the thumb drive, but he did not apply for patents internationally and that remains his biggest regret in life.
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24-03-2020, 11:24 AM
(This post was last modified: 24-03-2020, 11:24 AM by specuvestor.)
To be precise, some national carriers is for vanity purpose. For example nobody is going to fly to finland to transit. But on the other hand if Nepal doesn't have a national carrier nobody is going to pay for that either. So it's not one size fits all... we have to look deeper the purpose. Value investing is to delve deeper, which makes it interesting.
For Singapore we are a transportation hub for air and sea. That's why we developed NOL even when it's bleeding. Now that we gave it up we have strategic disadvantage. For example Maersk had moved to PTP to pressure us to give in to their clout. There is connected consequences.
And to sidetrack as bit, ya Trek2000 would have been Bee Tang rather than just "Tang" now
https://en.wikipedia.org/wiki/Henn_Tan
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
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25-03-2020, 10:19 AM
(This post was last modified: 25-03-2020, 10:23 AM by AQ..)
Temasek very bz
First SCM/SCI/Keppel
Then Singtel/Bharti (got some help from GIC there)
now SIA and perhaps Vistara.
Hopefully the Fed's QEternity can reflate the US, else its PE might go to bits.
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