Singapore Airlines spreads its wings wider across the US

Courtesy Singapore Airlines

Singapore Airlines (SIA)’s catchy “seamless to Seattle” byline echoes the popular Hollywood movie title “Sleepless in Seattle” starring Tom Hanks and Meg Ryan as it announces plans to launch a non-stop service to the Washington state gateway in north western USA. Flight time is estimated at 16 hours 30 minutes. Mark the date: 3 September 2019.

Seattle will be SIA’s fifth US city in the airline’s network after San Francisco, Los Angeles, New York and Houston. It is also the fourth city to be served non-stop from Singapore. Houston is served via Manchester in the United Kingdom (UK), the first connection between the US and the UK for the airline, which has historically been fighting hard to secure rights to cross the pond from Britain; its initial interest was to fly from London to New York.

Clearly the Singapore carrier is spreading its wings wider across the US. Based on current schedules, the Seattle service will increase SIA’s operations to 57 flights weekly. In the early days, the airline also flew to Honolulu; today, that destination is served by its budget subsidiary Scoot.

Strategically, SIA is well placed in the major hub cities, serving almost the four corners of the US. Seattle is a good bet as a western gateway into the heart of the US, particularly when it can also leverage on the wide network of Alaska Airlines in their partnership. Seattle is also a hop away from Vancouver in western Canada which SIA used to serve but may now use Seattle as the alternative.

At home, Changi Airport’s hub status will be enhanced by SIA’s success to channel traffic through the airport to regional destinations.

As SIA pushes more into the US, you may wonder which other cities are also on its radar. Will it be Chicago next? Too early to think about it? Not quite, in this business. And if you think Seattle is some ten months away, according to the SIA website, flights will be available for booking from 18 November 2018.

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Qantas is changing the game

Courtesy Getty Images

After the successful launch of the non-stop Perth-to-London flight in March, Qantas is now working on plans to introduce a non-stop Sydney-to-London flight, which is expected to take a little more than 20 hours. Boeing and Airbus have been invited to retrofit an aircraft that will fly the distance, and Qantas CEO Alan Joyce expected a launch by 2020.

This is set to be a game changer, continuing the momentum set by the Perth non-stop which, according to the Australian flag carrier, is performing well, and in fact, exceeding expectations. Mr Joyce himself said early signs were positive, and that the new route “is the highest rating service on our network.”

The task now is how to make the ultra-long haul comfortable enough to influence the pattern of travel and get non-believers on board. According to the Independent, a Twitter poll with over 1,200 responses showed that 40 per cent would prefer a non-stop flight, 30 per cent would want a break in the journey, and the remaining 30 per cent said it would depend on the fare.

“We’re challenging ourselves to think outside the box,” said Mr Joyce. “Would you have the space used for other activities – exercise, bar, creche, sleeping areas and berths?”

Maybe think, along the line of a cruise?

One suggestion put forth was converting the plane’s cargo hold into sleeping pods.

With more non-stop ultra-long haul flights from Australia – Perth now, Sydney next and most likely Melbourne to follow suit – to London and possibly other European destinations such as Paris and Athens (and further down the road to key destinations in Africa and the Americas as well), how will this affect the competition?

The Kangaroo Route has been a lucrative route for Qantas and rivals that include Singapore Airlines (SIA) and Middle East carriers, notably Emirates Airlines (despite its alliance with Qantas), Etihad Airways and Qatar Airways, flying via their home airports. Even Cathay Pacific may be counted as a veritable competitor.

However, these airlines are themselves also operating the ultra-long haul, so they are not unaware of how the game may be changing. Take, for example, the Middle East: Emirates, Etihad and Qatar are all operating non-stop to Los Angeles, albeit from their different home airports of Dubai, Abu Dhabi and Doha respectively, in close proximity, and this is besides Saudi Arabian Airlines (Saudia) flying from Jeddah. Both Emirates and Qatar are also flying non-stop to Auckland.

Asian rivals Cathay Pacific and Philippines airlines both fly non-stop from New York to Hong Kong and Manila respectively, and will soon be joined by SIA connecting the Big Apple with Singapore. Cathay and Philippines are also competing on the non-stop option from Toronto, while SIA and United Airlines are taking on each other flying non-stop between San Francisco and Singapore.

Perhaps to the relief of Qantas, British Airways (BA) has expressed no interest in mounting non-stop flights between Australia and the UK. In fact, over the years, BA has reduced its interest in Australia, currently operating only one service from London to Sydney via Singapore.

It seems that the ultra-long haul aims at narrowing the rivalry on key routes where point-to-point traffic is the target, and is perhaps also an attempt to claim native rights, cutting out third parties jumping on the bandwagon. The question is whether there is adequate traffic to justify the operations.

The fortunes of some airlines may shift, so too those of some airports which rely on transit traffic with no real attraction other than being a convenient stop en route. One only needs to look back at how Bahrain Airport quickly lost its status when new technologically advanced aircraft able to fly a longer distance without refuelling emerged on the horizon.

Dubai International and Singapore Changi are two popular hubs on the Kangaroo Route. How will their fortunes change?

Yes, they may lose some traffic with Qantas flying direct from Perth, Sydney and Melbourne, but all is not lost so long as there continues to be up to 70 per cent of travellers who are yet convinced the ultra-long haul is the way to fly. The airlines themselves understand the dynamics, hence the dual strategy, offering the options. Qantas may reduce some flights, but it is unlikely to completely stop flying via Dubai or Singapore. Similarly, SUA will not cease making a stop at an Asian port just because it has introduced non-stop flights to Los Angeles and San Francisco.

Again, if one sees how Dubai International does what Bahrain could not do, reviving the importance of a Middle East hub with convenient connections to Europe and Africa, no less owing to the vast network of Emirates, and how Changi has enticed transit and transfer passengers with being more than just another airport, one can be hopeful of their future. They may even flourish as important regional hubs, feeding traffic from and into the ultra-long haul flights.

And don’t forget, non-stop flights cost more. People spend their dollar in different ways.

Japan Airlines eyes a bigger slice of budget market

Courtesy Reuters

It is taking Japan Airlines (JAL) a long time to launch a budget subsidiary, but it’s never too late if the budget market continues to grow. One may say that the Japanese carrier is treading with extreme caution, and even if the economic arguments are no stronger now than before, there can be no better reason than the Tokyo Olympics in 2020 for the belated introduction.

At home, rival All Nippon Airways (ANA) has been operating two budget carriers, namely Peach and Vanilla (which was the rebirth of a failed joint venture with AirAsia), and has plans to merge the two carriers in preparation for medium-haul international flights.

Foreign low-cost competitors include AirAsia, Singapore Airlines’ Scoot and Hong Kong Express. And, of course, there is Jetstar, the budget arm of Qantas, in which JAL has a minority share. It is therefore not exactly correct to say that the Japanese national carrier has not tapped into the budget market earlier, though not in as big a way as the others.

The yet-to-be-named budget carrier, to be based at Narita International Airport, will commence operations with two jets in mid-2020, offering medium and long-haul flights to Asia, Europe and the Americas. It will operate to some of the destinations already served by JAL.

The timing cannot be coincidental, as this is when ANA is expanding the operations of Peach into the international market. Until then, JAL seems quite content that the competition is limited to the domestic market, but with Peach offering another option for loyal Japanese travellers besides others to fly beyond and into Japan at lower fares, it cannot be taken lightly.

The budget market in Asia is a growing business. JAL director Masaru Onishi said the airline will cater to a broad group of Japanese and foreign passengers, and will take a more experimental approach to its product than the full-service parent carrier. There will be a mix of budget and premium options for meals and seats. The airline aims to be profitable within three years.

JAL may be Johnny-come-lately, but it has ambitious plans for its budget offspring. The competition is set to intensify, not just with compatriot ANA but also with other foreign carriers.

Qantas continues to fly high, confident about the future

Courtesy Getty Images

Qantas continues to fly high with new confidence while most other airlines cringe at the prospect of reduced profitability or even losses in the wake of rising fuel prices.

The Australian national carrier posted a record profit of A$1.6 billion (US$1.2 billion) for the year up to June 30, 2018 – 14 per cent higher than last year and 5 per cent higher than the last record profit in 2016. All that despite incurring a fuel bill that increased by almost A$200 million, and which is expected to go up another A$690 million the current year.

Qantas chief Alan Joyce said: “We’re facing another increase to our fuel bill for FY19 and we’re confident that we will substantially recover this through a range of capacity, revenue and cost efficiency measures, in addition to our hedging program.”

The confidence is something of a rarity these days as the fortune of the industry becomes increasingly volatile these days, and most airline leaders choose to be conservative in their forecast moving forward, often citing the uncertainty of the fuel price and, of course, competition.

Qantas has risen to become Asia-Pacific’s – if not the world’s – star performer.

The airline’s performance was boosted by a record profit of A$1.1 billion, up 25 per cent, in the domestic market, achieved through the combination of Qantas and Jetstar’s network, schedule and product strengths in key markets.

Internationally, the airline’s earnings rose7 per cent on the back of a 4-per cent increase in capacity, achieving a load factor of 84 per cent. The new Perth-London route is said to be the highest rating service in its network, and this should cause some concern to its rivals plying the kangaroo route, Singapore Airlines being one of them.

Mr Joyce emphasized that “capacity discipline” was key to Qantas’ success. With strong forward bookings, the airline can certainly afford to be optimistic.

Scoot raises fares, but Jetstar and AirAsia are not following suit

IT is only a matter of time before more airlines move to raising their fares, purportedly on the ground of rising fuel costs. The question is when is a good time, as they watch for signs of support in the market.

Courtesy Scoot

Budget carrier Scoot took the lead in announcing a 5-per cent hike in its fares from September 1. According to the airline, fuel makes up on average 32 per cent of its total operating costs and has risen by more than 30 per cent.

What is interesting is how other regional carriers are not ready to jump on the bandwagon, not yet. Jetstar said its fares will remain stable at the moment, while AirAsia said: “We have built a lot of resilience into our business by being vert disciplined about non-fuel costs, and we are confident we have sufficient latitude to manage any change in oil price.”

Has Scoot made the move a little too soon when its competitors are not ready to follow suit? History has shown that the market usually takes the cue from the leading airline. With its closest rivals holding out, one can expect the competition to intensify in a market that is driven by price more than service and brand. Higher fares may also soften the market, and this only adds to the competition. Anyway, do not bet on Jetstar and AirAsia to hold their fares steady if jet fuel costs continue to escalate, but they clearly see an advantage in moving a little slower for now.

Interestingly, Singapore Airlines, which owns Scoot, has said it is not raising its fares.

News Update: US carriers abide by China’s Taiwan ruling

https://www.todayonline.com/world/us-airlines-plan-accept-china-demands-naming-taiwan?cid=emarsys-today_TODAY%27s%20evening%20briefing%20for%20July%2025,%202018%20%28ACTIVE%29_newsletter_25072018_today

Refer Much Ado About China’s Geography, June 30, 2018
https://airlinesairports.wordpress.com/2018/06/30/much-ado-about-chinas-geography/

2018 Skytrax airline awards: Largely the same winners

Top airlines remain largely the same ones as last year’s.

Yet again we note how the top ten airlines remained largely the same ones as last year’s. If you’re good, you’re good, so it seems, and consistency won the day.

Singapore Airlines (SIA) which was second last year switched places with last year’s winner Qatar Airways. All Nippon Airways (ANA) and Emirates Airlines held steady in 3rd and 4th position. Cathay Pacific moved down one rung to 6th,, exchanging places with EVA Air. Lufthansa held its 7th position. Garuda Indonesian followed Hainan Airlines up one notch to 8th and 9th position respectively. The only new entrant to the list was Thai Airways International, which actually only moved up one rung from 11th last year, edging out Etihad Airways as it fell from 8th to 15th position.

So much for the excitement as the winning airlines, going by the result of the survey, continued to please their customers who found no reason to think otherwise of them.

Unlike some high-brow surveys whose results lean heavily on the premium class, Skytrax does readings across all classes.

Best for First Class was SIA followed by Etihad and Air France. This used to be the realm of Asian and Middle-East carriers, and let it not be a surprise to see two European carriers in the ranking. Lufthansa took 4th place.

Best for Business Class was Qatar followed by SIA and ANA. You would imagine that if an airline is good in First, it should not be too far off in Business. However, Air France was not placed in the top ten list and Lufthansa ranked 8th.

Best for Premium Economy was Air New Zealand followed by Qantas and SIA. It looks like the Pacific airlines are pretty good with this product. Lufthansa and Air France ranked 4th and 5th.. There was an absence of Middle-east carriers because they didn’t believe in such a class. Qatar chief CEO Akbar Al Baker had said: “We won’t roll out premium economy… I don’t think there is room for premium economy in our region, and of course in Qatar Airways. We give you a premium economy seat with an economy class price.” Sounds familiar if you recall the early days when SIA too expressed the same skepticism. However, Emirates has said its new Airbus A380 expected to be delivered in 2020 will feature premium economy.

Courtesy Star Alliance

Best for Economy Class was Thai Airways followed by SIA and Qatar. This category was dominated by Asian carriers with the exception of Lufthansa in 9th position.

Only these six airlines were placed in all three categories of First, Business and Economy (excluding premium Economy since not all airlines offer this sub-class): ANA, Cathay, Emirates, Lufthansa, Qatar and SIA. You can then rest comforted that whatever class you travel with these airlines, you will be treated without discrimination.

But is the Skytrax survey a good guide in choosing which carrier to fly with? Generally people can agree on makes a good airline. What matters when you travel with an airline? For the long haul, seat comfort is an important feature. Inflight entertainment, if you look for some distraction and are not otherwise doing something else or trying to catch up on shuteye. A good meal, if you are not one who will not eat airline food no matter what (unfortunately this is not featured in the Skytrax survey). Cabin cleanliness, of course, and that includes the condition of the washrooms. How often do you see the crew give it a clean-up and spraying some kind of deodorant to try and make it as pleasant as it possibly can be? Above all, the service provided by the cabin crew, to be treated in a friendly manner and with respect. Not forgetting service on the ground in the event that you may need assistance, as when your bag is damaged or has not arrived with you.

Perhaps the ranking for some of these more specific services may be of some help:

Best Economy seat (First and Business should be way better anyway): 1st Japan Airlines, 2nd SIA and 3rd Thai Airways.

Best cabin crew: 1st Garuda, 2nd SIA and 3rd ANA.

Best inflight entertainment: 1st Emirates, 2nd SIA and 3rd Qatar.

Cleanest cabin: 1st ANA, 2nd EVA and 3rd Asiana Airlines.

Best airport service: 1st EVA, 2nd ANA and 3rd Cathay.

But, of course, you can’t expect a single airline to be best in all categories, but you get a pretty good idea of where they all stand, perhaps with exceptions.