Singapore Airlines gets back in the race

Courtesy Singapore Airlines

Courtesy Singapore Airlines


Singapore Airlines (SIA) did better last year (FY 2014-15 ending Mar 31) posting an operating profit of S$340 million (US$257 million), an increase of 32.8 per cent from $256 million of the previous year. This was attributed to lower fuel costs and reduced capacity. .Q4 performance shows a tighter ship with a marginally lower number of passengers carried and reduced RPK. Consequently the load factor dipped from 77.0 to 76.1 per cent year-on-year, but the passenger breakeven load factor improved from 82.9 per cent to 78.9 per cent on the back of the lower cost of carriage.

It is an encouraging sign as the airline appears ready to regain lost ground but continues to be diffident about the challenges it faces: an uncertain global economy, the unlikelihood of the fuel price holding at the current level, and the competition posed by rival airlines. In a statement, SIA said demand in key markets is soft, primarily on Americans and European routes which are key revenue generators. In recent years SIA has been challenged by aggressive competitors such as Cathay Pacific and Emirates Airlines on all its major long-haul routes, eastward and westward, even southward. The increase in importance of Hong Kong and Dubai as hub gateways at the expense of Changi Airport has also impacted on SIA’s performance to carry traffic through its home base and to benefit from hub connections.

The next leap for SIA is likely to come from its new Premium Economy which will be introduced on its Airbus A380-800 and Boeing 777-300ER fleets. The first flight with the new cabin will take off on Aug 9 this year, operating to Sydney from Singapore. Although it has taken a long time for the airline, renowned to be a trend setter in its early days, to be convinced of its viability, SIA may yet prove it can catch up and be a veritable rival to beat. The new cabin will become available next on flights to Beijing, London, Tokyo, New Delhi, Frankfurt and New York according to plans announced by the airline.

At the same time, SIA said, it will continue to upgrade and refurbish its First and Business Class products. After all the attention it has directed in recent years to boosting the image of its regional carrier SilkAir, rescuing the beleaguered Tigerair which continues to lose money, and building up the identity of budget subsidiary Scoot, it is time that the world’s best airline in several past surveys redirect its energy back to getting ahead in the premium race.

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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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