Mr Sum said one challenge is that SIA often takes minority stakes without full strategic or operational control, meaning it shares in the financial downside without being able to control fleet, network, capacity, costs or management.
Airlines are difficult investments to begin with, he added, being capital-intensive, cyclical businesses with high fixed costs, volatile fuel prices and heavy regulatory constraints.
SIA’s stakes have also tended to be in challenging markets or airlines already in need of substantial improvement, he said.
OCBC equity research analyst Ada Lim made a similar point about SIA repeatedly entering structurally difficult markets.
“The carrier has attempted, time and again, to enter the domestic aviation market in Australia, which is reportedly one of the most lucrative in the world due to an effective duopoly structure between Qantas and Virgin Australia,” she said.
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