The JV between Singapore Airlines Limited (SIA) and Airbus has received regulatory approvals on Friday. Recall that the JV is based in Singapore for the establishment of a civil aviation flight training centre for Airbus aircraft types.

SIA announced it has now been issued with about 14.9m shares in the JV company, Airbus Asia Training Centre (AATC), for a consideration of ~US$14.9m, representing 45% equity stake in the company. Consequently, AATC is now considered an associated company of SIA.

While we see this JV positively, we do not expect significant contribution from the JV in the nearterm, and with SIA announcing its FY15 results on 14-May, we maintain HOLD rating with an unchanged FV of S$11.59.

Source: OCBC Research - 20 Apr 2015