Singapore Airlines loses non-stop US appeal

Courtesy Singapore Airlines

Singapore Airlines (SIA) will cease non-stop services from Singapore to New York’s Newark Airport and Los Angeles that it introduced in 2004. The all-business class flights will stop flying in Q4 2013.

SIA will continue to fly to New York’s JFK International via Frankfurt, and to Los Angeles via Tokyo.

The decision came in the wake of a continuing slow recovery of the global economy against volatile fuel prices when demand for both long-haul and premium travel has been badly affected. Cathay Pacific Airways, for example, too has cut back long haul capacity. But SIA’s problem may be more ingrained than what appears to be an universal application.

It was with much aplomb that SIA introduced the non-stop all-business class services (upgraded from a two-class configuration of business and premium economy in 2008), a bold pioneering initiative that other airlines have yet to be convinced of its viability. By all reasoning, this strategy should work wonderfully. Passengers, particularly business travellers, prefer non-stop services because they offer uninterrupted rest (or work time), shorter flying hours and the absence of transit hassle.

It may be said that luck was not on SIA’s side, as the global economy went into a tailspin soon after and corporations not only downgrade but also cut back executive travel. Since then, there has been a marked erosion of demand for premium travel, even as average premium-seat fares between Asia and the U.S. have come down – 4.8 per cent lower in September than a year ago according to Bloomberg.

There are deeper issues: the stiff competition faced by SIA, and Singapore’s lack of volume for end-to-end traffic and its reduced appeal as a destination or transit/transfer point when more direct services become available. That SIA does far better on its traditional three-class configuration to the U.S is testimony of the importance of the mix during these lean times, though, looking back, it may be wishing it has retained the premium economy for the non-stop services.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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