SIA steady after Transport Minister’s comments, IATA app update

• Singapore Airlines Ltd (SGX: C6L) shares are up 0.6% on Tuesday (06 April 2021)
• Singapore Transport Minister Ong Ye Kung had said a day earlier that the recent suspension of passenger flights into Hong Kong had no impact on a planned travel bubble
• SIA also revealed on Monday that it will roll out the IATA’s travel pass on its mobile app in the middle of 2021, following a ‘well-received’ trial
• The airline’s stock currently has an average 12-month share price target of S$4.40
• Buy or sell Singapore Airlines shares with an IG account

SIA share price update

Singapore Airlines’ (SIA) shares rose slightly on Tuesday (06 April 2021), a day after Singapore Transport Minister Mr Ong Ye Kung said last week’s suspension of SQ passenger flights to Hong Kong will not affect a planned travel bubble between both countries.

‘Travel bubble operates on the basis that the flights travelling within the bubble carry only what we call 'OD' — origin-destination passengers. Transit passengers are out outside of the bubble, so it wouldn't affect. We continue to work with Hong Kong to restore this travel bubble,’ Mr Ong said in Parliament on Monday.

Last Friday, Hong Kong’s civil aviation authorities announced in a press release that SIA flights will not be allowed to land in Hong Kong between 03 April and 16 April.

The suspension came after it was confirmed that a transit passenger on SQ882, flying from Singapore to Hong Kong on 31 March, had contracted Covid-19 prior to landing.

Additionally, three other passengers had also ‘failed to comply with requirements specified under the Prevention and Control of Disease (Regulation of Cross-boundary Conveyances and Travellers) Regulation (Cap. 599H)’.

SIA says IATA travel pass trial was ‘well-received’

On Monday, the airline also revealed that it is planning to integrate a digital health verification process into its mobile app from the middle of this year, following a ‘well-received’ trial of International Air Transport Association’s (IATA) travel pass mobile app.

‘We have received positive feedback from them and are pleased to note that they are open to using the IATA travel pass app for international travel in the future,’ SIA told ChannelNewsAsia.

‘We are reviewing the routes that the IATA travel pass app can be implemented on. More details will be shared once available’, the group added.

Last month, SIA became the world’s first airline to pilot the IATA travel app, when it began testing with passengers travelling from Singapore to London between 15 March and 28 March.

The digital travel pass allows passengers to manage and keep track of their pre-departure Covid-19 test results and vaccination status.

SIA’s share price rallied over 10% following the announcement of the pilot programme.

What's the SIA stock outlook?

In terms of stock outlook, SIA currently has an average 12-month price target of S$4.38 and consensus rating of ‘neutral’, according to the latest SGX StockFacts data.

The most recent investment thesis had come from CIMB analyst Raymond Yap, who raised his price estimate to S$6 a share, on the prediction that the company’s full-year FY2022 adjusted book value per share (BVPS) estimate will grow by 9% on fuel derivative gains.

Yap also lowered his call on SIA’s share price to ‘hold’ from ‘add’, in a note titled ‘Time to take profit?’ on 18 March 2021.

His rating was based on the fact that the airline’s stock price was ‘merely 11% shy of its high of S$6.42 on 02 January 2020, just prior to the outbreak of Covid-19’.

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