SIA stock yesterday fell to an historic low of S$7.75 (A$8.75), 30 per cent off Thursday's record low of $S11.

The Singapore government-controlled airline, which bills itself as one of the world's best, was facing a write-off of at least S$273 million even before it decided to buy a bigger stake in Air New Zealand last week.

But the terrorist crisis in the US, where SIA derives much of its long-haul revenue, has simply exacerbated its position.

SIA's main external investment is a 49 per cent shareholding in Richard Branson's Virgin Atlantic, an airline best known for its trans-Atlantic service between London and the US, notably New York. Air traffic has slumped since the hijackings.

SIA also has to bear the costs from the crash of flight SQ006 in Taipei last year, as well as any potential impact from the investigation into the 1997 crash of a plane of wholly owned associate SilkAir.

But it is Air New Zealand that is giving SIA the most immediate grief.

As SIA's woes deepened on the sharemarket, there were strong suggestions in the market yesterday that it might renege on its obligation to increase its shareholding in the Kiwi carrier.

SIA has refused to comment on the status of its Air New Zealand plan but it is understood chief executive Cheong Choong Kong was huddled in talks with senior advisers yesterday on the appropriate course of action.

The Singaporeans are worried about possible legal action against Air New Zealand's shareholdings brought by the regulator, the Australian Securities and Investments Commission.

The Singapore airline has been in pursuit of Air New Zealand for several years and succeeded in taking a 25 per cent stake in it in April last year, paying NZ$3 a share for the stake. Air NZ shares closed at NZ$0.30 (A$0.25) in Auckland yesterday, down 40 per cent on the day, and 90 per cent under what SIA originally paid.

And there was further bad news for SIA, also Singapore's leading air freight carrier.

Singapore's non-oil exports fell 30 per cent in August, with little sign that the export-driven economy, the first in Asia to slip into recession this year, would improve.

SIA has also come under fire for not proceeding with a June agreement to extend its Air New Zealand stake at NZ$1.31 a share and assist in the re-capitalisation of the now collapsed Ansett.