Will SATS' food volume bear the brunt of SIA's reshuffling scheme?

They could look into providing optional meals for Scoot passengers.

Despite Singapore Airlines’ (SIA) route reshuffling of 17 Silk Air destinations which will be transferred to its budget arm Scoot, SATS’ food volume will not be on the losing end, UOB Kay Hian (UOB KH) said.

“The transfer of routes to Scoot could theoretically lead to lower meals provided, but given that Silk Air overall capacity is still expected to rise, SATS would not be affected by lower volume of meals provided in FY20,” UOBKH explained.

Also read: SATS food solution revenue to rise 4.1% in FY19

SATS could also look into providing meals for Scoot passengers, the research firm explained. However, this scheme will be strictly optional for passengers given that it is a budget airline.

On the brighter side, the transfer of the 14 aircrafts to Scoot could give SATS’ ground handling operations as Silk Air's fleet would be replaced. We have not incorporated the changes in our model.

Photo from Reuters.