Will Singapore Airlines finally get to fly trans-Pacific from Australia to the United States?

Singapore, a leading voice in advocating open skies, is hoping to conclude a more liberal aviation agreement with Australia, following a recent meeting of the two nations’ leaders, namely Singapore’s prime minister Lee Hsien Loong and his Australian counterpart Malcolm Turnbull.

Courtesy Singapore Airlines

That naturally revives Singapore Airlines’ dream of gaining rights to the lucrative trans-Pacific route from Australia to the United States.

While both Singapore and Australia have already agreed to allow carriers from both countries to operate unlimited flights between them, with Australian carrier Qantas benefitting from using Singapore Changi Airport as a regional hub to points beyond Singapore, it has been more than two decades since SIA expressed its interest in operating trans-Pacific flights from an Australian port.

A review in 2006 by the Australian authorities denied SIA’s application to fly the route that has since been opened to only American carriers besides home carriers. Despite SIA’s argument that the proposal would boost tourism in Australia, clearly Qantas was the thorn in SIA’s side as the authorities were apprehensive that the reciprocity would not be in the flying kangaroo’s favour.

Since then there has been no new overt push in that direction. So, will SIA finally get to fly trans-Pacific from either Sydney or Melbourne to the United States?

As Qantas grows from strength to strength as demonstrated by its record performance in the last couple of years, perhaps Australia could afford to be a little less protectionist.

While for now, it looks like the answer is still blowing in the wind, there is nevertheless a ray of hope emanating from the high-powered meeting.


Qantas continues winning streak

It’s happy days again for airlines, more specifically carriers in Asia Pacific which is identified as a growth potential for the industry.

Just over a week ago, Singapore Airlines announced Q3 (Jan-Mar 2018) group profit of S$330 million (US$250 million), increasing by S$37 million or 12.6 per cent (see Singapore Airlines does better without Tigerair, Feb 15, 2018).

Courtesy Qantas

This is now followed by Australia’s Qantas reporting record half year profits (Jul-Dec 2017) of A$976 million (US$761 million), increasing by 14.6 per cent. This came in the face of higher fuel costs, a competitive domestic market and challenges in international capacity growth. The result beat the previous first half record achieved in 2016.

Impressively, Qantas Domestic and budget subsidiary Jetstar’s domestic flying operations combined posted their highest ever first half Underlying EBIT of A$652 million. Qantas controls nearly two-thirds of the Australian market. However, Qantas International, in the words of Qantas chief Alan Joyce, “held its own” with a six per cent decline in profit against a slight increase in revenue.

Mr Joyce remained upbeat about future earnings propsects – the kind of sentiment that is not often expressed by many an airline CEO these days. Surely the airline must be doing something right, and Mr Joyce would remind you that the Transfomration program he introduced in 2014 has certainly borne good fruit.

As Mr Joyce put it, “After several years of turning this business around, Qantas now has a momentum behind it.” He added: “Today’s result comes from investing in areas that provide margin growth and a network strategy that makes sure we have the right aircraft on the right route.”

After Qantas, Air New Zealand is expecting to also announce record profit, boosted by tourism growth.

Air New Zealand tops again

Courtesy Air New Zealand

AirlineRatings.com has named Air New Zealand as the world’s best airline for 2018. Other airlines that make the top ten in descending order are Qantas, Singapore Airlines (SIA), Virgin Australia, Virgin Atlantic, Etihad Airways, All Nippon Airways (ANA), Korean Air, Cathay Pacific and Japan Airlines.

According to the editorial team, airlines must achieve a seven-star safety rating (developed in consultation with the International Civil Aviation Organization) and demonstrate leadership in innovation for passenger comfort to be named in the top ten.

The evaluation team also looks at customer feedback on sites that include CN Traveller.com which perhaps explain little surprise in both AirlineRatings and Conde Nast Travel naming Air New Zealand as their favourite. (See What defines a best airline? Oct 19, 2017) Four airlines, namely SIA, Virgin Australia, Virgin Atlantic and Cathay Pacific are ranked in the top ten of both lists. These look like consistently global favourites.

Notable absences from the AirlineRatings list are Middle east carriers Qatar Airways and Emirates Airlines. While these airlines scored for service in other surveys, they may have lost the lead in product innovation for which most of the airlines ranked by AirlineRatings are commended. Virgin Australia’s new business class is said to be “turning heads” and Etihad is said to provide a “magnificent product throughout the cabins.” Looking ahead, Air New Zealand will feel the pressure from Qantas and SIA for the top spot. (See Singapore Airlines steps up to reclaim past glory, Nov 3, 2017) In the same survey, Qantas is selected for best lounges and best catering services, and SIA for best first class and best cabin crew.

For those who think best airline surveys are often skewed by the halo effect of service provided in the upper classes, AirlineRatings has named Korean Air as best economy airline.

What defines a best airline?

What defines a best airline, considering the different surveys that rank them? Conde Nast Travel has just released its readers’ choice of the best in 2017, and it is no surprise the list is made up of Asian, Middle East, European and SW Pacific carriers.

Courtesy Air New Zealand

Of course, it depends on the readership, but recognizing that, it also points to what really makes these airlines stand out. It is clear that the premium class service weighs heavily – the seat comfort and the fine food.

Etihad Airways (ranked #16) offers “the future of first-class comfort: a three-room “residence” with a bedroom, private bath with shower, and lounge.” Emirates (#4) offers “posh perks for premium fliers – cocktail lounges, in-flight showers… part of the reason it scores so high among travellers.” And the suites on Singapore Airlines (#3) offer “a pair of fully flat recliners that can be combined into a double bed.”

Mention is made of the premium economy class in almost all the ranked airlines” KLM (#20), Lufthansa (#19), Japan Airlines (#17), All Nippon Airways (#13), Qantas (#12), Cathay Pacific (#10), Virgin Atlantic (#7), Virgin Australia (#6), Singapore Airlines (#3) and Air New Zealand (#1).

So it may appear to be the voice of the premium travellers that is being heard. Maybe coach travellers aren’t too concerned about the ranking, more driven by price and less frilly factors, although to be fair, the Conde Nast report did mention of at least one airline, i.e. Etihad Airways (#16), not ignoring “those sitting in the back.” While many travellers may resign to the belief that the economy class is about the same across the industry, it is reasonable to assume that an airline that strives to please its customers in the front cabins will most probably carry that culture or at least part of it to the rear.

Although you may draw consensus across many of the surveys, it is best best to treat each one of them in isolation. It is more meaningful to try and draw intra conclusions within the findings of the particular survey.

You will note in the Conde Nast findings, there is an absence of American (including Canadian) carriers, never mind that of African and South American carriers.

Asiana Airlines (#8) is ranked ahead of Korean Air (#11).

All Nippon Airways (#13) is ranked ahead of Japan Airlines (#17). V

Virgin Australia (#6) is ranked ahead of Qantas (#12).

The order of the “Big 3” Gulf carriers is as follows: Qatar Airways (#2), Emirates (#4) and Etihad Airways (#16).

Of European carriers, there is the conspicuous absence of the big names of British Airways (compare Virgin Atlantic #7) and Air France, and the pleasant surprise of Aegean Airlines (#9) while SWISS seems to be regaining its erstwhile status years ago as being the industry standard.

The best belongs to Air New Zealand as the quiet achiever.

Ultimately, the results also depend on the group of respondents whose experiences may be limited to certain airlines.

Other airlines ranked in the top 20 of the Conde Nast survey: Finnair (#14), Turkish Airlines (#15), EVA Air (#18).

What Qantas’ strategy shift means for Changi, SIA


Qantas continues to fly high

Courtesy Getty Images

Qantas reported another good year ending June 30, 2017. The Australian flag carrier posted a profit of A$852 million (US$67.4 million) – its second highest in the airline’s 97-year history – although it declined by 17.2 per cent compared to last year’s A$1.03 billion.

The question to ask is how Qantas manages to turn in stellar performances when rivals such as Cathay Pacific and Singapore Airlines (SIA) are dipping into losses? Cathay lost HK$585 million (US$103 million) in 2016, and SIA incurred a loss of S$41 million (US$29 million) in Q4 of FY2016/17. (See Cathay Pacific axes 800 jobs: Is this the answer? May 27, 2017)

Qantas chief executive Alan Joyce points to the success of the Transformation Program introduced three years ago. The program is now complete with all targets met on time, having achieved asignificant improvement in financial performance, record customer advocacy and record employee engagement. Consequently the airline has incorporated a culture of transformation and continuous improvement goin forward.

“We operate in a very competitive environment, so continuous improvement is crucial,” said Mr Joyce.

The star performer is Qantas Domestic, advantaged by the booming domestic market. It earns an operating margin of 11.5 per cent on revenue of A$5.63 billion. With 90 per cent of the market, it is far ahead of its rival Virgin Australia.

Record earnings were also reported by the Jetstar Group with an operating margin of 11.6 per cent on revenue of A$3.60 billion. Outside Australia, these include Jetstar operations based in Singapore, Japan and Vietnam. The failure to set up base in Hong Kong as a consequence of protest from Cathay and Hong Kong Airlines has not stopped the budget carrier from growing.

Qantas International which used to be the bane of the airline’s financial performance has plowed back into the black in spite of the stiff competition it faces. It posted an operating margin of 5.7 per cent on revenue of A$5.70 billion.

Qantas’ Asian strategy that saw increased capacity to key Asian destinations has proven to be well-timed and placed. The airline will be increasing international capacity by 5 per cent in the first half of FY2017/18, mainly to desinations in the the growing Asian market.

Farther down the road, the airline plans to fly non-stop from Sydney to London and New York by 2022 subject to the availability of aircraft that can travel those long distances. In the near term, Qantas will be flying direct from Perth to London next year. This, said Mr Joyce,“is a huge leap forward” for the flying kangaroo.

Indeed, and it is likely to change the game somewhat, affecting not only would-be erstwhile transit points and competing off-shore airlines which must perforce make those stops. All the more so will airlines now find the need to be creative in influencing the traveller’s preference and enhancing brand loyalty in their marketing effort.

New Qantas safety video: Attraction or distraction?

Courtesy Qantas

Courtesy Qantas

Ever since Air New Zealand made waves breaking away from the conventional in-flight safety video, featuring among other things Middle Earth, a number of other airlines have taken up the challenge to “engage” the travellers, many of them who may find the old style too boring to deserve attention.

The new Qantas video features Australian destinations across every state and territory, ranging from the Victorian ski fields to sand surfing at Queensland’s Moreton Island, thus killing two birds with one stone promoting travel to these destinations at the same time. Qantas chief executive Alan Joyce admits: “This video doubles as a perfect tourism ad.”

While the main goal (as it should be) was to make the safety video “engaging as well as informative,” there are questions about the effectiveness of getting across the primary message as to what to do to keep safe and how to react in the case of an emergency. There is the important question of context. The order of priority in presentation is not necessary received in the same order. And, let’s face it, people get tired of most re-runs soon enough.