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Singapore Airlines’ Share Price Hits a 52-Week High: Can the Airline Soar Higher Next Year?

The group’s share price has surged to a 52-week high in line with these good results, up 11.8% year to date to S$5.60.
With the airline coasting on a wave of optimism, can SIA’s share price continue to soar to new heights in 2023? Onlooker
Singapore Airlines’ Share Price Hits a 52-Week High: Can the Airline Soar Higher Next Year?
A temporary surge?
SIA’s passenger numbers look good because of a low base effect last year when travel had still not resumed in full.

At the time, the government had introduced vaccinated travel lanes that allowed a limited number of travellers to board flights based on a set of onerous conditions.

Investors should also note that the current surge in numbers may also be due, in part, to “revenge spending” where people have accumulated funds that they could not spend in the last two years.

There are hints that this may be the case.

Total billings on Singapore-issued credit and charge cards was around S$20.2 billion for the third quarter of 2022 (3Q2022), up from S$16 billion in 3Q2021.

This is impressive when you consider that 3Q2022’s spending is also 17% higher than the S$17 billion spent in 3Q2019 before the pandemic broke out.

On this note, it was reported that higher holiday costs were the reason behind the increased card use. Onlooker

For context, the average ticket size for travel-related spending has increased by around 20% since 2019.

With the ticket size increase exceeding the increase in spending when compared with 2019, this means that volume was still lower than pre-pandemic levels.

Once the revenge spending effect wears off, SIA may experience a dip from the current surge in 2023. ChuckleChuckle
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