There’s good news for both the aviation and travel sectors.
Just last week, Prime Minister Lawrence Wong broke ground on the construction of Changi Airport’s Terminal 5 (T5).
This is an expansion project that will last more than a decade and will position Singapore’s airport to handle the expected surge in air travel within the Asia-Pacific region.
T5 is designed to handle 50 million passengers a year and will effectively double the size of the current Changi Airport, allowing it to handle 140 million passengers yearly, up from the present 90 million.
Construction will intensify in the next few years and peak in 2029, with plans to connect the new terminal to the Thomson-East Coast and Cross Island MRT lines.
Here are five Singapore companies that will benefit in the long run from the brand new T5.
Singapore Airlines (SGX: C6L)
Singapore Airlines, or SIA, is Singapore’s flagship carrier.
Changi Airport Group (CAG) announced that SIA and its budget arm Scoot will consolidate their operations in T5 once the terminal opens in the mid-2030s.
SIA said that this consolidation will provide space for its future growth and also help to improve “operational synergies”.
T5 will also have room for carriers to expand their operations if needed.
SIA looks to be the biggest beneficiary of T5 as passenger traffic in the Asia-Pacific region is projected to double in the 2040s.
The blue-chip group will also benefit from the increase in city links.
Changi Airport is currently linked to more than 170 cities, but T5 will increase this to more than 200 by the mid-2030s.
SIA reported a record set of earnings for its fiscal 2025 (FY2025) ending 31 March 2025, boosted by a one-off accounting gain of S$1.1 billion from the Air India-Vistara merger.
Net profit stood at S$2.8 billion, up 4% year on year, but operating profit for FY2025 fell by 37.3% year on year to S$1.7 billion because of lower yields from heightened competition.
Nevertheless, Singapore’s flagship carrier declared a final dividend of S$0.30, taking the total FY2025 dividend to S$0.40.
SATS (SGX: S58)
SATS is a leading provider of air cargo handling services and is also an airline caterer.
The group provides ground handling, baggage handling, and also serves food to airlines and institutions.
SATS is in a solid position to benefit from the expansion of Changi Airport as T5 will bring in more passengers, resulting in higher volumes of flights handled and meals catered.
The group reported a solid set of earnings for the first nine months of fiscal 2025 (9M FY2025) ending 31 December 2024.
Revenue rose 14% year on year to S$4.3 billion while operating profit soared 136.4% year on year to S$367.4 million.
Net profit catapulted more than eightfold year on year to S$205.1 million.
SATS also saw cargo tonnage increase by 16.6% year on year to 6.8 million tonnes in 9M FY2025, while the number of aviation meals served climbed 24% year on year to 48.6 million.
SIA Engineering (SGX: S59)
SIA Engineering, or SIAEC, is a maintenance, repair and overhaul (MRO) specialist for the airline sector.
The group provides base and line maintenance, fleet management, and cabin solutions for SIA and other airlines.
With the increased volume of flights arriving at the new T5, SIAEC should see a sustained increase in maintenance volumes and enjoy more MRO work.
The MRO company reported an encouraging set of results for FY2025 as revenue rose 13.8% year on year to S$1.25 billion.
Net profit leapt 43.8% year on year to S$139.6 million, and the group proposed a final dividend of S$0.07, one cent higher than the previous fiscal year.
SIAEC intends to expand its geographical presence while growing its capacity and capabilities.
The group will also continue upskilling and training its employees to handle new types of aircraft to prepare them for the future, while rolling out a new Enterprise Operating System to streamline and optimise business processes.
Straco Corporation (SGX: S85)
Straco is a developer and operator of tourism assets and owns Shanghai Ocean Aquarium and Underwater World Xiamen in China.
It also owns the Singapore Flyer, an iconic landmark dotting Singapore’s city landscape.
With the increase in tourism expected over the next decade, Straco should also benefit from T5 as CAG expands the airport’s capacity to handle more visitors.
The group will witness a boom in Singapore’s tourism, which will benefit its Singapore Flyer asset.
For 2024, revenue dipped 0.8% year on year to S$81.5 million, but net profit rose 6% year on year to S$27.2 million.
The tourism asset group saw a total of S$33.6 million of free cash flow churned out.
Straco proposed a final dividend of S$0.015 and a special dividend of S$0.005, taking the total dividend for 2024 to S$0.02.
This level of dividend was similar to what was paid out for 2023.
Banyan Tree Holdings (SGX: B58)
Banyan Tree is a global hospitality company with a portfolio of over 91 hotels and resorts in over 20 countries.
The group has 12 global brands that offer distinctive and experiential stays for its guests.
Banyan Tree has hotels and resorts spread out across Asia in countries such as China, Japan, and Vietnam.
In addition, the group just opened its Mandai Rainforest Resort last month, marking its 100th resort.
The influx of tourists into the Asia-Pacific region will benefit the hospitality group as it offers luxury experiences for its guests.
For 2024, total revenue climbed 16% year on year to S$380.6 million.
Net profit for the year jumped 33% year on year to S$42.1 million.
A final dividend of S$0.013 was declared, slightly higher than the S$0.012 paid out for 2023.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
