Singapore Airlines rationalizes operations

Courtesy The Straits Times

Courtesy The Straits Times

THE recent announcement by Singapore Airlines (SIA) that budget subsidiary Scoot will take over its Jeddah services from May 2016 points to a Group rationalization strategy that is slowly taking shape.

SIA presently flies three times weekly to the Saudi Arabian city via Dubai. Scoot will replace these services with thrice-weekly non-stop services between Singapore and Jeddah, and with plans to increase the frequency. SIA did not disguise the rationale for the transfer as oen that will “better optimise the utilisation of the SIA’s Group resources.”

There are four carriers in the SIA stable – parent SIA, regional operator SilkAir and budget subsidiaries Scoot and Tigerair. As the market line blurs between full-service and low-cost operations, duplication of services and intra-competition are likely to take a toll on the Group’s performance.

Already there are signs of merging between Scoot and Tigerair as they compete in the same market. SilkAir may continue to replace SIA on some regional routes, and Scoot too as it expands, so that SIA can better focus on the long haul and high capacity routes. Complementary, rather than competitive, is the direction to go.

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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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