New year but similar challenges for SIA

IT MAY be a new year but declining yields - a recurring theme in 2016 - will continue to be a concern for Singapore Airlines (SIA).

In fact, yields will probably be an ongoing worry for South-east Asian carriers in general which are staring at a tough operating environment. The growth of low-cost carriers over the years has resulted in a competitive short-haul market. Meanwhile, in the long-haul market, the Gulf carriers and recently the North Asian airlines are aggressively adding capacity to Europe and North America at cut-throat fares.

For SIA, both yields and passenger loads have been under pressure and will continue to be so. Yields are down 10 per cent and 15 per cent from two years ago and four years ago respectively, estimates Centre for Aviation (CAPA) analyst Brendan Sobie.