Our SIA Expectations Unchanged, Uncertainty Rating Updated to Low Reflecting a More Stable Outlook

We keep our fair value estimate on no-moat Singapore Airlines, or SIA, at SGD 5.30 following its third-quarter business update. SIA’s nine-month EBITDA of SGD 3,755 million makes up 74% of our full-year estimate with EBITDA margin around 60 basis points above our forecast. While the cargo segment is slightly weaker than we had assumed, we believe this will be made up by passenger demand that appears to remain firm. We are lowering SIA’s Morningstar Uncertainty Rating to Low from Medium given the improving visibility in travel demand. The low uncertainty rating is in line with SIA’s historical rating.