Will SIA ride on the back of a Middle-East crisis?

The growing political turmoil in Syria accompanied by the fear of a military strike by the United States and its allies has sent global stock markets into a dive. For Singapore Airlines (SIA), whose stock price has been steadily declining since the beginning of the year, this could not come at a worse time. Expectedly, in line with the market, the stock fell, hitting as of yesterday its lowest point – a far cry from what it used to be.

Until now, SIA is badly in need of new initiatives to boost its performance in an increasingly challenging environment where the competition seems to be taking on a different form. It is to be seen if a new ad campaign that it is launching, said to be more customer-focussed, will go some way to improve its fortune. However, many rival airlines are now doing what SIA has been doing, for example, to be up-to-date with product innovation and to provide comparable customer service. The playground has also shifted, and it is not just Changi Airport that is feeling the loss of traffic through Singapore consequent to Qantas shifting its hub when it enters into partnership with Emirate Airlines but also SIA the risk of more passengers hopping on to the kangaroo route via Dubai.

The looming Syria crisis in itself may not pose as serious a problem to the aviation business as the peril of it spreading to becoming a wider Middle-East crisis. Immediately, what becomes a concern is the price of jet fuel – the perennial bane of an airline’s operations. If you had heard ever so often the exhortation of airline chiefs every time that they reported a company’s results, this will be another of those fears come true. Another round of spiralling fuel price will hit not just SIA but all airlines hard. But will it hit the smaller budget carriers harder than the rest, forcing their exit from the competition or making them nearly as expensive as the legacy airlines? If it happens, will airlines such as SIA – assuming that they can hold out better against the crisis – regain some of their erstwhile low-end traffic?

That may be small mercies. In the bigger arena, will the flare-up in the Middle-East cause more passengers to avoid stopping in ports like Dubai and benefit airlines like SIA that operates direct flights from Singapore to Europe?

You can never tell. The point is that the competition is always shifting.


About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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