SIA to expand Covid-19 testing pilot programme over next few months

The national carrier launched a Covid-19 testing pilot programme and issued US$500 million worth of bonds this week.

  • SIA (SGX: C6L) launched a Covid-19 testing pilot programme on 20 January 2021
  • The airline group also announced on the same day that it has issued US$500 million worth of 3% notes due in 2026
  • The US bond programme was massively oversubscribed, said SIA
  • Shares closed even at S$4.33 following both announcements
  • Trade SIA, long or short, with an IG account today

SIA launches pre-departure Covid-19 testing programme

Things appear to be looking up for Singapore Airlines (SIA).

The national carrier said on Wednesday (20 January 2021) that customers will now be able to book their pre-departure Covid-19 polymerase chain reaction (PCR) and serology tests, and receive their results via a one-stop online portal.

The pre-departure test service is currently available to Singapore Airlines and SilkAir passengers departing from Singapore, Jakarta and Medan, as part of a new pilot service launched on the same day.

There are plans to expand this service to more cities in the SIA and SilkAir network over the next few months if the pilot is successful, the group said in a press release.

With pre-departure testing becoming a mandatory requirement for more countries, this new service would allow SIA’s customers to book their test appointments with their preferred clinic from a list of recognised testing facilities available on the online portal securely.

They will also receive their test results through the same portal, which they can then present upon check-in at the airport.

These test results will then come with a QR code that enables travel verification under the new digital health verification process that SIA is piloting with the International Air Transport Association.

US$500 million of 3% notes issued

The airline also revealed in an SGX filing on 20 January 2021 that it has issued US$500 million worth of notes due in 2026, which it first announced last Wednesday (13 January).

The US dollar bonds bear interest at a fixed rate of 3% per annum payable semi-annually in arrear on 20 January and 20 July in each year.

The notes, which come under SIA's S$10 billion multicurrency medium-term note programme, were issued at an issue price of 99.573% of their principal amount and in denominations of US$200,000 and in higher integral multiples of US$1,000.

The carrier added that the issuance was oversubscribed with the final amount adding up to over US$2.85 billion, with the majority of demand coming from institutional investors.

Following both announcements, SIA shares closed the 20 January 2021 session even at S$4.33 each.

What’s the outlook for SIA shares?

Five out of 11 analysts recommended ‘buy’ on SIA, three rated it ‘hold’ while three had ‘sell’ calls as of Tuesday (12 January 2021), according to Bloomberg data.

Meanwhile, SGX StockFacts data revealed an average 12-month target price of S$4.306 from the analysts polled.

UOB analyst K Ajith on 14 January reiterated a rating of ‘sell’ on the stock and price target of S$3.80 a share.

‘SIA’s latest operating statistics, not surprisingly, offers little to cheer and the carrier is likely to report a similar core loss of approximately S$470m for 3QFY21 (third quarter 2021)’, Ajith wrote.

In the last two weeks, Morningstar’s research team also gave a ‘hold’ call with a S$3.76 target, with Credit Suisse ‘neutral’ on a S$3.10 target.

SIA said last Monday (11 January) that it expects its total passenger capacity to recover to about 25% of pre-Covid levels by the end of March 2021.

How to trade Singapore Airlines with IG

Are you feeling bullish or bearish on SIA’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Singapore Airlines Ltd> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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