Singapore transport sector poised for moderate growth in 2025

Demand in air transport is expected to remain strong, but weaker ticket pricing could pressure profitability.

Singapore’s transport sector is positioned for moderate performance in 2025, with growth underpinned by recovery trends in air travel and logistics.

CGSI said demand in air transport is expected to remain strong, but weaker ticket pricing could pressure profitability, partially offset by lower oil prices, which underpins the "Reduce" call on SIA's stock.

It cited upside risks such as stronger-than-expected cargo demand, as seen in October 2024 when SIA reported a 20% year-on-year increase in cargo freight tonne kilometre (FTK) demand, outpacing a 14% capacity expansion.

Another potential positive factor is declining jet fuel prices, which fell from US$108/bbl in Q4 2023 to an average of US$89/bbl in Q4 2024 (as of November 25).

For land transport, CGSI expects UK EBIT margins to improve further in FY25F as contract renewals continue, whilst ComfortDelGro’s (CD) four new bus contracts in Manchester are projected to contribute $7-12m in annual operating profit.

It also forecasts a 16% PATMI growth in FY25F, driven by UK tailwinds, new tender wins, and contributions from mergers and acquisitions.