A Brief History of Singapore Airlines Going Forward

Courtesy Bloomberg

The history of Singapore Airlines (SIA) dates back to the incorporation of Malayan Airways on May 1, 1947. The airline changed its name to Malaysia Airways in line with the formation of Malaysia in 1963. The entity splits into SIA and Malaysian Airlines System in 1972, seven years after Singapore left the Malaysian federation and became a nation in its own right. Then on SIA expanded quickly and became one of the world’s top airlines.

SIA established Tradewinds in 1975 as a regional carrier catering mainly to the leisure market. This was SilkAir’s predecessor as the airline looked beyond into the business segment and assumed its new identity in 1976. With the growth of budget travel, SIA partnered leading budget carrier Ryanair to set up Tiger Airways which commenced services in September 2004. Tiger underwent several changes over the years, performing below expectations. In the meantime SIA set up Scoot, a fully-owned budget subsidiary said to be targeting the medium (and now long-haul) while Tiger focused on the short-haul. The line soon blurred, and by the end of 2016, Tiger was assimilated into Scoot.

As SIA expanded as it grew, so did it reconsolidate by contracting as the aviation landscape shifted. The demise of Tiger was imminent when Scoot was formed, not only to extend the range of the budget operations but also to recapture ground lost by Tiger. The intra-competition that followed did not make much sense. The costly lesson from Tiger is that it can be hard to repair a badly tarnished image and easier to start a new slate.

Now, from four down to three, will there be further restructuring of the SIA stable?

Courtesy AFP

According to OAG, an air travel intelligence agency based in the UK, Scoot has overtaken SilkAir in the number of seats offered. The budget airline is also about a third as big as SIA in the economy market. And it is growing at a faster rate than its regional sibling. Besides, parent SIA looks set to refocus on premium travel, a move that some analysts believe to favour the expansion of Scoot, particularly when the line between budget and legacy airlines begins to blur across the industry.

This does not augur well for a carrier like SilkAir operating in the middle of the field. Since its inception, the so-called regional carrier has been operating in the shadow of the parent airline and continues to do so despite recent efforts to change that image. Does this forebode a merger between SilkAir and Scoot, going forward, although the former has time and again insisted it is not a budget airline? Can Scoot on the other hand be more than a budget carrier?

What’s in a name anyway? So says the Bard, a rose by any other name would smell as sweet.

Competing to be the best: How reliable are survey readings?

Courtesy Cathay Pacific

Courtesy Cathay Pacific

SKYTRAX has named Cathay Pacific as the world’s best airline in 2014, displacing last year’s winner, Emirates. In second and third place are Qatar Airways and Singapore Airlines (SIA) respectively. Asian and Middle East carriers dominated the ranks of the top ten: Emirates (4th), Turkish Airlines (5th), All Nippon Airways (6th), Garuda Indonesia (7th), Asiana Airlines (8th), Etihad Airways (9th) and Lufthansa (10th). No American carrier was placed.

Are those really the world’s best airlines?

The winning airlines are unlikely to question the validity of any survey, as you can see how many of them are listing awards from all and sundry like a laundry list as endorsement of their good reputation. The corollary must be that if you accept the accolade willy nilly, so must you recognize one and all sideswipes.

Which leads to the next question: Is Skytrax the standard?

Skytrax claims its World Airline Awards to be “the global benchmarks of airline excellence”. The winners are decided by 18.85 million travellers from over 160 countries, and that should take care of any misgiving about the survey having an inadequate population and most importantly, the bias factor or its susceptibility to political influence.

Cathay CEO Ivan Chiu said: “The World’s Best Airline award is particularly important to us because it was decided by the votes of close to 19 million travellers from around the world.” Cathay was placed sixth last year and has won the award four times, previously in 2003, 2005 and 2009.

Emirates president Tim Clark said: “These awards are widely regarded as the industry’s benchmark for excellence. To be voted ‘World’s Best Airline’ by millions of discerning travellers is something… to be proud of.”

Qatar CEO Akbar Al Baker said: “These awards are highly rewarding as they are judiciously voted by passengers a true account of the overall experience felt by customers who have travelled with the airline.” Qatar won in 2011 and 2012.

Courtesy Etihad Airways

Courtesy Etihad Airways

However, Etihad’s withdrawal from participation apparently over differences in the methodology may tell a different story. Although it had never won, Etihad was consistently placed in the top ten in the past five years, ahead of Emirates in some years. Despite its withdrawal, Etihad was still ranked in this year’s survey because according to Skytrax, “an airline cannot be withdrawn from the World Airline Awards since these results are directly decided by customers.” That statement should add to the survey’s credibility, yet without taking sides and arguing the toss about fairness, one can only suspect and understand that the subjective nature of the survey (and of any survey) is naturally exposed to dissatisfaction, whether baseless or with reasons which may well be valid, the way that the Oscars results do not sit as squarely with a lot of people. Now and then you get an outstanding actor declaring his or her disinterest in the awards.

The issue is usually one of weightage and relevance of selection. However designed, the respondents may to some degree be steered by what is being asked. Take, as matter of curiosity, the 2014 Skytrax survey readings for the top ten. SIA is ranked ahead of Cathay for inflight entertainment, cabin cleanliness, First Class amenities, First Class cabin overall, seats in First, Business and Economy, and First Class meals; but close behind Cathay in other areas except for its noted absence for airport services, Business Class amenities and Business Class meals. Yet Cathay takes the cake.

It is encouraging to see breakthroughs by airlines such as Turkish and Garuda in a game dominated by the familiar big names. Interestingly, Turkish ranks above everyone else except Emirates and SIA for inflight entertainment. It is no surprise that Garuda tops for cabin crew, the epitome of Asian service culture, in a category swept by Qatar (6th) and nine other Asian carriers: Cathay (2nd), SIA (3rd), Asiana (4th), Malaysia Airlines (5th), EVA Air (7th), ANA (8th), Thai Airways (9th) and Hainan Airlines (10th). In like fashion, with the exception of KLM (8th) and Qantas (9th), the airport services category belonged to Asian carriers: ANA (1st), EVA (2nd), Thai (3rd), Asiana (4th), Cathay (5th), Korean Air (6th), Garuda (7th) and Dragonair (10th).

Yet, giving credit where it is due, one may question the appropriateness of comparing a carrier having limited global presence with others that are more exposed in the global arena, and how a population of largely local respondents compares with the wider global population. Hence it may be more meaningful to look at niche rankings, but we all love the sweeping titles of the best overall, don’t we? Even regionalized readings must be viewed in their proper context. The Qantas Group went ga-ga over Jetstar Airways’ win as best low-cost airlines in Australia/Pacific over AirAsia X (2nd), Scoot (3rd) and Tiger Airways (4th), but the world’s best is AirAsia followed by AirAsia X in second place ahead of Jetstar Airways (4th). Note how the preferences change when the population mix changes.

Who then really is the best overall? It may be difficult to say for sure one definite airline, and under the circumstances a wider reading of the top three or five or up to ten may be a more sensible assessment. The contest is to get into that magic circle of the elite.

Courtesy TODAY

Courtesy TODAY

Equally significant is the consistency over time. Airlines such as Cathay, Emirates, Qatar and SIA may pat themselves on the back for being there long enough to deserve their stripes. Narrow that down further, and you will see that only two airlines – Qatar and SIA – have been consistently placed in the top three in the past five years. Asiana had a good run from 2010 to 2012. Cathay was just outside in 4th place until it tumbled to 6th last year and bounced back to be this year’s winner. The wider reading should lead some airlines such as Qantas to ask why it has dropped out of the respectable club.

One survey alone cannot be definitive, hence winning across notable surveys may strengthen the reading. Compare the Skytrax results with Conde Nast Traveler’s assessment by its readers – based on the same principle of uninfluenced feedback – and you will begin to understand why. In its ranking for foreign carriers (outside America), Etihad is placed 4th behind Emirates (2nd) and ahead of Qatar (7th). Cathay is 7th, and the winner is SIA. Korean Air (8th) did better than rival Asiana (18th), and so did Japan Airlines (16th) over ANA (21st). The Conde Nast top ten includes Virgin Atlantic (3rd), Air New Zealand (5th) and Swiss International (10th).

Then there is the annual Airline of the Year award given by the Air Transport World (ATW) magazine. The criteria take into consideration financial performance (which debunks the myth that the world’s favourite airline is not necessarily the most profitable or even profitable) and visible leaps forward in services. However, naming only one winner can often lead to suspicions of political influence (the way that some beauty pageants are said to be when a winner is crowned) and the tendency to pass the honour around although airlines such as ANA (2007 and 2013) and Air New Zealand (2010 and 2012) had been named twice. Cathay (2006), SIA (2008) and Asiana (2009) had all had their turns. Delta Air Lines is ATW’s Airline of the Year 2014.

Several other magazines also dish out their own annual awards, which may be based on their readers’ feedback, or assessed by a panel of judges or arrived at combining the two methods. Some of them target niche markets such as awards that recognize the best airline for business travel. That in a way avoids spillover or halo effects and sectarian prejudices as, for example, an airline that impresses in First and Business Class may pay scant attention to what happens in Economy.

Nevertheless, surveys are useful tools in maintaining competition. Everyone loves to win, unless you do not give a hoot about how the world sees it and how that may affect your bottom line. So too, everybody loves a winner; but that is no guarantee that the traveller will necessarily fly with the named best airline. Without downplaying their influence on the market, such awards probably mean more to the airlines than the travellers.

This article was first published in Aspire Aviation.

Singapore Airlines’ challenges

Courtesy Singapore Airlines

Courtesy Singapore Airlines

THE good news is that Singapore Airlines (SIA) carried more passengers – 18.6 million passengers or an increase of 2.3 per cent – in FY2013/14 but the bad news is that yield has not caught up. In a statement issued by the airline, SIA said: “Passenger bookings in the current quarter are expected to match the planned increase in capacity. However, yields are expected to remain under pressure due to promotional activities undertaken to support loads, and other airlines offering aggressive fares while increasing capacity.”

Overall it is good news that the airline made an operating profit of S$256 million (US$205 million), an increase of 36.9 per cent – this, despite a Q4 operating loss. It is the other companies within the Group that are not performing as well. SIA Cargo continued to incur losses, though at S$100 million it was an improved performance compared to a loss of S$167 million a year ago. Both SIA Engineering and SilkAir suffered a decline in profitability; and the latter in particular, down by more than 50 per cent from S$97 million to S$35 million. Losses in Tiger Airways worsened by S$109 million.

Moving forward, it is the airline that will continue to shore up the performance of the Group, which earned an operating profit of S$259 million in FY 2013/14, an increase of 13.1 per cent. Cargo yield is expected to remain weak, and SilkAir appears to have a problem forging an identity of its own. Investment in Tiger Airways will continue to take a toll on the overall result as it struggles to shed its Indonesian Mandala joint-venture. Refocusing on the parent airline’s challenges in an increasingly competitive landscape must be a priority. The recent announcement that SIA will introduce premium economy is a positive step forward. It cannot afford to lose its place in the main stream competition.

Can Tiger change its stripes?

BUDGET carrier Tiger Airways has ditched its leaping tiger logo and changed its name to Tigerair. If the proverbial leopard cannot change its spots, is the new Tiger a different airline?


Changing a name and updating a logo are all part of a corporate game to project a fresh image when the old begins to tire. A whole slew of airlines including Singapore Airlines (SIA), Cathay Pacific, Qantas, British Airways and United Airlines have done their part molting and face-lifting, the reason most commonly cited being one of keeping up with the times and be contemporary. So, in the words of Tiger’s Australian CEO Rob Sharp, the initiative is part of a bid to bring the airline into a “new era”.

For all that may be said about how the new logo and name embody the key elements of Tigerair’s personality which is “warm, passionate and genuine”, or that according to Group chief executive Koay Peng Yen in Singapore they project the carrier’s “commitment towards a better and bolder tigerair”, the truth is that Tiger badly needs an image makeover.

The airline has suffered from complaints about flight delays and cancellations, a lack of compassion and poor customer service. Its Australian offshoot, which has not turned in a profitable performance in all its six years of operations, languished under a tarnished image when in 2011, Australia’s Civil Aviation Safety Authority grounded its entire fleet over concerns of safety. Tiger was also beaten by rival Jetstar as the best low-cost carrier in Australia in a recent Skytrax survey. Outside Australia, Tiger also faces stiff competition from Jetstar as well as AirAsia.

One cannot be sure about what Mr Sharp meant when he said of the new Tiger: “We’re a real airline for real people.” However, he came closest to scratching beneath the surface of the truth when he asserted that the change was “more than just a fresh coat of paint and a new logo” but “the start of the revival of our airline.” Although he was referring specifically to the carrier’s Australian set-up, the change which will entail more emphasis on customer service is as applicable in the wider context of Tiger’s operations. Clearly more needs to be done as pointed out by critics and sceptics on the internet, that unless the carrier visibly improves its services, the makeover is only skin-deep.

The new Tiger without its stripes must be a new airline guided by a new service philosophy or the renewed will and sincerity to deliver on promises in order to rein in the competition. If SIA were tardy in realizing this, Virgin Australia which acquired a 60-per-cent stake in the Australian outfit last year (and approved by the Australian Competition and Consumer Commission only in April this year) found the timing opportune for change. You cannot discount that Virgin’s acquisition might have been the catalyst for the logo and name change to signal a new beginning. Virgin could from now on as a majority shareholder steer the new entity without the trappings and frailty of a damaged past.

Tiger’s very own experience since inception has shown that having a successful parent is no guarantee of similar success down the line. One must not forget that Tiger is after all a low-cost carrier that plays by a different set of rules and SIA’s forte is premium travel, when alluding to that relationship.

Interestingly, when Tiger Airways was incorporated in 2003 (it commenced operations a year later), many observers thought its leaping tiger logo was an inevitable hark-back to the flying tiger of the old Malayan Airways and successor Malaysia-Singapore Airlines in which SIA claims its roots before Singapore and Malaysia split ways to operate their own flag carriers. Call it nostalgia, perhaps, or a clever ruse to reclaim birth rights. Whether it was deliberate or incidental, for reasons that one could only speculate, it is seldom that one can live the same dream in all its exactitude twice. It is time to construct a new one.