Should investors participate in SIA's big rights issue?

UNLESS I have no choice in the matter, I never fail to choose Singapore Airlines (SIA) over its competitors when I travel, even if it means paying more for the ticket. And, let's face it, flying with SIA always costs more.

Yet, I have never felt the urge to own shares in SIA, because its investment fundamentals are simply terrible. It operates in an industry plagued by cut-throat competition. Fuel costs are unpredictable, and have swallowed up almost one-third of its revenue over the past decade. SIA also has to constantly invest in new aircraft in order to maintain its edge.

No doubt, the company has first-rate management. Since 2000, the airline has coped with the fallout of the 9/11 terrorist strike, the Global Financial Crisis, massive volatility in oil prices, and the rise of low-cost carriers. Through it all, for every full financial year, SIA has managed to stay in the black and pay a dividend.