(07-06-2011, 08:47 PM)wsreader Wrote: [ -> ]There were 2 recent news reports of landing gear problem:
- SIA Airbus A380-800 turned back to Hong Kong on 5 Jun 2011
- Quantas Boeing 747-400 returned to Singapore on 4 Jun 2011
Does anyone know which company or companies serviced the aforementioned aircrafts?
There is always a perennial risk to invest in airline/airline servicing company. As a retail investor, I do not have sufficient industry knowledge to appreciate the risk.
SIA Engineering Co. Ltd services all of SIA's aircraft. However, since the air turn back occurred after departing from Hong Kong. Highly likely that the transit check was carried out by a local ground servicing crew in Hong Kong. Unlikely it's by SIAEC. As for Qantas, I do believe they have their ground crew or ground engineers stationed in Singapore. Not too sure about the servicing crew though.
If people actually sell due to Kim Eng's report with stated TP of $3.66, I would seriously be very happy to buy from them!
Wah if look at figure 5 at the report, the forecasted revenues are actually going to fall by that much? It looks for like one quarter of earnings shown. haha.
But if its true, MW you better be careful. There must be a basis for that type of forecast.
(08-06-2011, 02:36 PM)mrEngineer Wrote: [ -> ]There must be a basis for that type of forecast.
I don't disagree that there is a basis for such forecasts. After all, analysts must earn their money doing some "real" research right?
If their basis for the downgrade and subsequent lowering of valuation metric is based purely on short-term trends, then if I were to view myself as a long-term shareholder; I can safely collect at levels which I feel offer a suitable return on my investment.
(08-06-2011, 02:27 PM)Musicwhiz Wrote: [ -> ]If people actually sell due to Kim Eng's report with stated TP of $3.66, I would seriously be very happy to buy from them!
I wonder how would fuel supplier (like China Aviation Oil) be impacted from a decline in airliners profitability ? Interestingly, the KE report forecast growth in SIAEC EPS for the next three years !
Business Times - 29 Jun 2011
SIAEC's fleet service contract from SIA Cargo renewed
By VEN SREENIVASAN
SIA Engineering Company has bagged a $358 million maintenance, repair and overhaul job from sister company Singapore Airlines Cargo. The five-year contract will succeed a services agreement that expires this month.
'The new agreement, commencing July 1, 2011, is firm for three years, with a two-year extension if agreed conditions are met,' the company said in a statement.
Under the agreement, the company will provide the SIA Cargo fleet with a broad spectrum of services that will add $358 million to its order book.
'SIAEC and SIA Cargo have had a strong and mutually beneficial relationship for many years,' said William Tan, CEO of SIAEC. 'The renewal of this services agreement reaffirms our commitment to providing high quality and comprehensive engineering services to SIA Cargo.
'Our partnerships with key customers, leading OEMs and strategic industry players enable SIAEC to develop a broad and deep range of capabilities, which provides airlines with seamless engineering support, fast turnaround and high operating efficiencies.'
As the new agreement is a renewal of the existing agreement, it is not expected to have a material impact on SIAEC's performance for FY2011/12.
SIAEC, which is 80 per cent controlled by SIA, has aggressively expanded its network of joint ventures and associates around the region. It has inked a deal with Sagem (SAFRAN Group) to launch a state-of- the-art avionics facility in Singapore.
The new facility of Safran Electronics Asia (SEA), owned 49 per cent by SIAEC and 51 per cent by Sagem, supports the latest aircraft types and is designed for expansion of capabilities to handle next-generation aircraft, such as the Boeing B787 Dreamliner and the Airbus A350.
The company has a client base of more than 80 international carriers and aerospace equipment manufacturers and provides line maintenance services at Changi Airport for more than 50 international carriers, as well as airframe and component overhaul on some of the most advanced and widely used commercial aircraft in the world.
It gets almost 80 per cent of revenue from non-SIA clients.
(Vested)
Jul 26, 2011
Demand for new jets soars
Airbus secures bulk of aircraft orders so far this year
By Karamjit Kaur, Aviation Correspondent
NEW jets are selling at a furious pace so far this year, thanks to a strong global aviation market and positive industry sentiment.
In the past six months, aircraft makers Airbus and Boeing have secured orders for more than 790 jets, compared with just 268 for the same January-June period last year. At the year's half-way mark, the order tally is already more than 70 per cent of last year's total of 1,104 aircraft.
Industry analysts expect the momentum to continue in the second half of the year with much of the demand for new jets, among Asian carriers especially, expected to cater to growth instead of aircraft replacement.
For consumers, this means more flights and destinations which will in turn spur more competition among airlines and possibly lower fares, they said.
A major driver of growth in the Asia-Pacific is the low-cost carrier segment, said Mr Brendan Sobie, a Singapore-based analyst for aviation think-tank Centre for Asia-Pacific Aviation.
At last month's Paris Air Show, Malaysian budget airline AirAsia announced an order for 200 Airbus 320neo aircraft while India's IndiGo signed for 180 A-320 and A-320neo planes.
Mr Sobie said: 'Within Asia, full-service carriers are now in a position where ceding more market share to low-cost carriers is inevitable.
'It is possible that low-cost carriers could even control 50 per cent of capacity within Asia (up from about 20 per cent currently) sometime in the next decade.'
Apart from AirAsia and and IndiGo, Singapore's Tiger Airways and Jetstar have also announced expansion plans.
Growth will come from other markets too, said Mr Jonathan Galaviz, chief economist at research and consulting firm Galaviz & Company.
He said: 'Growth in tourism will continue to drive the growth of airlines in all segments, from budget carriers to legacy carriers.'
Just last week, American Airlines' parent company announced what it called the 'largest aircraft order in aviation history' - 460 narrow-body Boeing and Airbus jets to be delivered between 2013 and 2022.
Airbus' success at the Paris Air Show has put it firmly in the lead, ahead of its American rival Boeing, in the numbers race.
From January to last month, the European planemaker secured 640 net aircraft orders, compared to just 151 for Boeing (as of June 28).
Airbus also delivered more aircraft during that period; 258 compared to Boeing's 222.
The second half of the year should be better for Boeing which plans to launch its re-engineered B-737 in the coming months, said Mr Sobie.
Mr Shukor Yusof from Standard & Poor's Equity Research was less optimistic.
He said: 'At this stage, Boeing's a bit late into the game and gives the impression that it is either lacking in ideas or in a sales person with John Leahy's (Airbus' chief salesman) qualities or both.'
karam@sph.com.sg
I wonder is the increase in demand for new jets going to mean more businesses or profits for SIA Eng? Would the airline companies negotiate for lower maintanence fees with SIA Eng due to their larger fleet and perhaps erode their margins? And also, SIA would definitely suffer from price war on the flights which lmay ead to limited growth for SIA Engrg due to restriction of CAPEX and higher dividends to be paid out to support the weaker airline business of SIA.
(26-07-2011, 09:02 AM)mrEngineer Wrote: [ -> ]I wonder is the increase in demand for new jets going to mean more businesses or profits for SIA Eng? Would the airline companies negotiate for lower maintanence fees with SIA Eng due to their larger fleet and perhaps erode their margins? And also, SIA would definitely suffer from price war on the flights which lmay ead to limited growth for SIA Engrg due to restriction of CAPEX and higher dividends to be paid out to support the weaker airline business of SIA.
Hmm, I would think that SIAEC's business model as evidenced that for their MRO business, capex is lower and their Balance Sheet is also ungeared; thus this is likely to continue regardless of whether SIA is starting a lower cost airline.
SIA may suffer from price wars and decreased profits, but airplanes still need to be serviced IMHO. And if globally there is more demand for jet planes, then these plans still have to be serviced and there are only these handful of reputable players in the industry. I see it as a good opportunity for SIAEC to increase not just volume but market share as well.
(Vested)
Business Times - 26 Jul 2011
SIAEC post 3.8% decrease in Q1 profit
By CARINE LEE
SIA Engineering group (SIAEC), a subsidiary of Singapore Airlines, on Tuesday posted a 3.8 per cent year-on-year decrease in net profit - down from S$70.8 million to S$68.1 million for the first quarter ended June 30, 2011.
Revenue fell from S$288.3 million to S$277.6 million, down 3.7 per cent from a year ago.
The resulting operating profit for the quarter was S$34.7 million down 4.1 per cent year on year, from S$36.2 million.
Share of profits of associated and joint venture companies - which accounts for 48.2 per cent of the group's pre-tax profit - decreased by 5.1 per cent to S$37.2 million.
Basic earnings per share was 6.23 Singapore cents, down 4.7 per cent year on year.
However, equity attributable to owners of the parent as at June 30 amounted to S$1,367.6 million, up 5 per cent from March 31.
Total assets increased by 6.7 per cent to S$1,730.8 million. Net value asset per share of 125 cents was 4.7 per cent higher than at end of March. As at June 30, the total number of shares issued was 1,093.8 million.
The company has no borrowings and the cash balance of the group at the end of this reporting quarter was S$645 million, up 10.9 per cent from March.
SIAEC expects demand for the group's maintenance, repair and overhaul services to be sustained despite the continuing global economic uncertainties and oil price volatility impacting the aviation industry.