The airline industry has been shaken up a lot in the past decade or so.
What has been shaking up the airline industry
While the industry as a whole isn’t historically especially profitable (especially when you consider the amount of capital investment required to run an airline), there have been two trends that have really shaken up the industry:
- The emergence of the “big three” Middle Eastern carriers, which have really started to compete globally, by offering one stop service between all kinds of city pairs outside their “region.” They’ve stolen significant market share from the network/national carriers.
- The continued growth of low cost carriers, which have taken up a lot of short-haul market share, and in some cases, even longhaul market share. They’ve driven down fares and decreased yields for the network/national carriers.
Combine those two factors, and you’ll quickly see why so many major airlines — Air France, British Airways, Qantas, etc.– have gone through major financial turmoil over the past decade or so.
Singapore Airlines is in trouble
I think many of us assume that Singapore Airlines is doing reasonably well. They are turning mild profits, which aren’t amazing, but are better than losses.
But the forecast they delivered to investors is bad. Via Yahoo Finance:
According to Mohshin Aziz, Associate Director of Equity Markets (Research) at Maybank Investment Bank, SIA’s management warned that analysts are “more optimistic than the company is” when it comes to the flag carrier’s future prospects.
“Our main takeaway from the briefing is that SIA’s future is grim if it doesn’t change the way it do business. The days of Singapore and SIA being the long-haul hub for the ASEAN region is over,” Aziz said.
How poorly is Singapore Airlines doing in some markets?
In particular, he highlighted that SIA’s long-haul routes have been almost consistently loss-making since FY09 as its competitors have refined their strategy and successfully established themselves into SIA’s markets.
Wow!!! Almost all of Singapore’s longhaul routes have been losing money for about six years. That’s insane.
What’s the cause of the problem? Exactly what’s impacting other major carriers as well — a combination of low cost carriers and the big Middle Eastern carriers:
“Regional peers have upped their game and encroached into SIA’s markets whilst the middle-eastern carriers continues to drink up SIA’s milkshake. Long-haul flights are in structural decline, short and medium haul is where the money is,” he noted.
Will Singapore go the way of Malaysia?
Malaysia Airlines was already in a terrible financial situation before their two tragic accidents last year. But they have a new CEO, Christoph Mueller, who is trying to turn the airline around. And he seems to have “diagnosed” the situation very similarly to Singapore Airlines’ management.
Mueller wants to shrink the airline hugely and turn Malaysia into more of a regional carrier, since that’s where the money is. And that seems to be the same conclusion the article comes to regarding Singapore Airlines:
“Long-haul flights are in structural decline, short and medium haul is where the money is. SIA’s future is to become a smaller airline than what it is today, can you foresee the management making such step?” Aziz asked.
Bottom line
It’s going to be interesting to see how Singapore Airlines transforms their longhaul operations, given that they’re apparently consistently unprofitable. On one hand it would be a real shame to see them not be as global of a carrier. On the other hand, if the competition from Middle Eastern carriers and low cost carriers is just too strong, they’ve gotta do what’s best for their investors.
They’re already taking steps to adopt to the market, by introducing premium economy, and by competing with low cost carriers through SilkAir and Scoot. But that’s only a start to what’s a much bigger problem.
Do you think Singapore Airlines will eventually shrink as an airline, or will they find a way to make longhaul flying profitable again?
Travellers would pay a premium to travel with SIA in the past because it was in a class of its own , with comfort nobody else had .
This is not the case today and SIA's offerings are too expensive compared to the competition , and have far less routes .
(all these are anecdotal but have also heard and read ever increasing amount of negative feedback)
singapore airlines' best days are behind them. they used to have the best service hands down (to justify the astronomical price-tags). these days, the ME3 (especially emirates) for the european legs, CX and NH for the transpacific legs trump them in terms of both price and service (and not to mention accruable mileage for all the different price points,...
(all these are anecdotal but have also heard and read ever increasing amount of negative feedback)
singapore airlines' best days are behind them. they used to have the best service hands down (to justify the astronomical price-tags). these days, the ME3 (especially emirates) for the european legs, CX and NH for the transpacific legs trump them in terms of both price and service (and not to mention accruable mileage for all the different price points, which united beats hands down... but let's not talk about "service" on united)
they used to be industry leaders but the last 5-10 years have seen them eating the dust of other carriers eg. premium economy (very late into the game, and not particularly spectacular like when they introduced suites, which have also been eclipsed by many other carriers top end offerings) entertainment systems (the krisworld entertainment system used to be top of its class, the excruciatingly slow meal service procedure (in its entirety, not the meal service itself)
krisflyer as a FFP also does not have enough pros (great mileage redemption for long haul flights, very occasional mileage redemption promotions, star alliance member) to outweigh the cons (the aforementioned mileage accrual rates. upgrades are also few and far between. twice in 17 years of gold membership, and that was also because i had purchased full priced economy tickets. as opposed to TG. once in 5 flights. and on *surprise* united, when i'm not even a 1K nor elite platinum member. expensive short haul redemptions. service fees required over and above mileage)
until they understand the reality they are operating in and innovate or evolve like they used to, the skies might darken considerably. and that would be a real shame.
As a long time loyal SQ fan and PPS member, I am saddened by the current state of Singapore airlines. The plans are aging and need overhaul but mostly the prices are astronomical. For example my mid year business class trip to Houston is 2x more expensive on Singapore airlines than on Emirates, Cathay or even Ana. Same with an upcoming trip to London which i have been trying to use Krisflyer miles on but...
As a long time loyal SQ fan and PPS member, I am saddened by the current state of Singapore airlines. The plans are aging and need overhaul but mostly the prices are astronomical. For example my mid year business class trip to Houston is 2x more expensive on Singapore airlines than on Emirates, Cathay or even Ana. Same with an upcoming trip to London which i have been trying to use Krisflyer miles on but only the higher priced catagory (780k miles!) is available.
I feel that the introduction of premium economy has raised prices and reduced seat availability except for PE catagory which is 70% of a business class seat and more expensive than full business on most airlines.
Im trying hard to stay loyal to SQ as my regional asia economy trips (approx 40 / year) are much better on SQ than most of the asian airlines but without the occasional business class then i dont get PPS. This is another negative on SQ as they dont consider economy trips as really counting to elite status.
I'm sorry for the Grammatical mistakes that I have made. I typed this comment in the middle of the night ( literally at 11:54pm - way pass my bed time)
I will be delighted to hear more from the community :)
Hi there ! I just stumbled onto this article and it gives a very interesting point of view about my national carrier , Singapore Airlines.
I guess competition is always there and if you do know the South East Asian ( SEA , for short ) airline industry , you could say that it is highly competitive.
I , however , disagree that SQ will not become a regional carrier - simply because...
Hi there ! I just stumbled onto this article and it gives a very interesting point of view about my national carrier , Singapore Airlines.
I guess competition is always there and if you do know the South East Asian ( SEA , for short ) airline industry , you could say that it is highly competitive.
I , however , disagree that SQ will not become a regional carrier - simply because we can't.
The stakes are high for SQ. Singapore is a young nation , we don't have a predominant race nor religion . We are a multi-racial and multi cultural society. We live with that and are proud of that.
This unique society is young ( as compared to other countries ). We have found ways to identify ourselves and create our own culture. The Singapore Girl and Singapore Airlines are one of the key figures. Up to today , many , myself included , are proud to see our icons take to the skies of the world.
Lets look back at Singapore's history and SQ's history.
SQ used to part of MSA - Malaysian -Singapore Airlines . When Singapore split from the federation of Malaysia the airline (MSA ) split into two , forming Malaysian Airlines and Singapore Airlines.
Singapore is a tiny island city state , and we do not have a domestic market to lean back on , so it was decided Singapore Airlines will focus on international routes , while Malaysian Airlines will focus domestic routes and the regional market.
Singapore's aviation industry took off with the expansion of SQ and Changi Airport.
It was make clear , right from the start that we had to be one of the best and we would have to target international markets to survive. Trust me when I say that the 1960s -1990s era for SEA and Singapore is very very different from what you see today.
No one expected Singapore to survive and prosper as a nation. That is a fact , a fact that is still relevant today.
Singapore's Aviation Industry accounts for 5.4% of our GDP and is a key industry which our government is investing in.
Singapore Airlines was created out of necessity , to connect a small city state with no natural resources and to boost the economy. To show the world what this tiny city state is really capable of.
Singapore Airlines may seem to go down the path to become a regional carrier , but it highly unlikely.
Your article is backed by statics , my argument is backed by the Singaporean Spirit and Pride of being a Singaporean.
Simply put , Singapore Airlines is too big to fail. Singapore Airlines is a national icon , the wings of Singapore. Suggesting that SQ will become a regional carrier will be suggesting that Singapore has weaken - economically and as a society.
This special relationship between Singapore Airlines , Singapore and the National Identity of Singaporeans is one that is heavily interlinked and entwined with one another .
Simply put , Singapore Airlines is highly unlikely to become a regional carrier because we will never allow SQ ,our national pride and icon , to go down that path.
With regards ,
A Secondary School Airline Enthusiast from Singapore & A Proud Singaporean
Like Loz, I believe it's absurd to think that Singapore would one day be relegated to a regional carrier. It's hard to take analysis from Yahoo seriously and I question the veracity of their data. EK has grown to be a worthy competitor but I share the sentiment that the Singapore government would do their darnest to keep SIA afloat. SIA and Singapore are too closely linked that the latter would never allow the former...
Like Loz, I believe it's absurd to think that Singapore would one day be relegated to a regional carrier. It's hard to take analysis from Yahoo seriously and I question the veracity of their data. EK has grown to be a worthy competitor but I share the sentiment that the Singapore government would do their darnest to keep SIA afloat. SIA and Singapore are too closely linked that the latter would never allow the former to die a quiet death.
SIA has weathered bad patches in the past and competition from EK isn't going to be enough to run it to the ground. It's hard to imagine that a leading airline like SIA to not be able to adapt and change to cope.
It would be hard to ever believe that Singapore airlines would be reduced to a regional carrier or even go the Malaysian way.
Singapore airlines have strategically positioned themselves to take care of the needs and use the hub and spoke concept to use their subsidiary regional carriers to add value to their prime product besides taking advantage of the ever popular exciting holiday/vacation destinations in S E Asia and neighbouring countries
1,...
It would be hard to ever believe that Singapore airlines would be reduced to a regional carrier or even go the Malaysian way.
Singapore airlines have strategically positioned themselves to take care of the needs and use the hub and spoke concept to use their subsidiary regional carriers to add value to their prime product besides taking advantage of the ever popular exciting holiday/vacation destinations in S E Asia and neighbouring countries
1, Singapore Airlines is a full service long haul carrier
2, Silk Air full service short haul carrier
3, Tiger Air 40/50% short haul LCC
4, Scoot is a regional service carrier.
Having position themselves well in both the regional and international market, they continue to be a formidable, carrier of International repute, where even today other airlines talk about.
Ongoing international surveys have placed Singapore Airlines consistently as one of the world best and customers feedback also supports these surveys.
Singapore Airlines pricing policy is also know to be several notches higher then the most expensive on the route,and their passenger load factor hovers in the high 85 % .
Singapore airlines home, Changi International Airport provides added value to Singapore Airlines in-flight and ground services. It would therefore be hard to believe that Singapore Airlines could down size itself to a regional carrier or ever think it would go the Malaysian way.
I agree with the jist of this article...in a word, SQ is toast. Until the arrival of the ME3 airlines (which is really only the ME1, EK, as the other two are still tiny in terms of number of planes and flights frequency) there was a good case for Singapore, and its airline, being a transit point between the ASEAN/Australasia region and Europe and America. It had a modern and efficient airport and a safe...
I agree with the jist of this article...in a word, SQ is toast. Until the arrival of the ME3 airlines (which is really only the ME1, EK, as the other two are still tiny in terms of number of planes and flights frequency) there was a good case for Singapore, and its airline, being a transit point between the ASEAN/Australasia region and Europe and America. It had a modern and efficient airport and a safe and well managed airline. Therefore it was a natural for this role. However, geografically, it isn't the best location for this role...the middle east is actually more equidistant between the great land masses of Europe and Asia and now that they have the airport/airline infrustructure this is becoming obvious. There is also the huge Indian market for travel to both Asia and Europe (and on to America) right on the doorstep. If not needing to fly direct, it makes more sense to stop-over in the ME than in Singapore. The Singapore home market is also unable to support a globe-straddling SQ on its own.
The other problem with SQ is that their pricing is just too damn high...usually double or more than competing carriers on a route. I know it's a premium product and superior to most others but there but there is a very limited market for paying such a premium, especially when on these long-haul flights, 50-75 percent of the time is spent asleep.
With the demise of both Malaysia and Thai airways, maybe SQ will be able to pick up more of the inter-ASEAN market and a bit of those airlines' long-haul traffic as well. SQ will still be around in 10 or 20 years, they just won't be the globe-straddling airline they've been for the past thirty years.
The problem with SQ is that SIN isn't well positioned for a transit hub, and the one place that makes sense is Indonesia (specifically CGK) where, no matter where I'm going, its not too far off to fly through SIN.
And yet, they're too expensive. I tried searching for a CGK-SIN-LAX flight and it was 2250 USD, while originating in SIN it was 1400. A CGK-SIN flight on its own costs about 300-500USD (a 95...
The problem with SQ is that SIN isn't well positioned for a transit hub, and the one place that makes sense is Indonesia (specifically CGK) where, no matter where I'm going, its not too far off to fly through SIN.
And yet, they're too expensive. I tried searching for a CGK-SIN-LAX flight and it was 2250 USD, while originating in SIN it was 1400. A CGK-SIN flight on its own costs about 300-500USD (a 95 minute flight!), and Garuda is rapidly building up its international network. Ten years ago, CGK-TYO, SYD, AMS and MEL nonstop didn't exist, all of them went through DPS or SIN first. Ten years ago, GA was the laughing stock of the Asian airlines.And yet, despite that, SIA's prices were far more reasonable then.
It would be a shame if SQ Opts out from the Kangaroo Routes their the only airlines that flies to the UK 1 stop from Christchurch and their customer service in the air can almost never be trumped even the worst crew I had on SQ was miles better then worst service on Air NZ
@tony One of the emirates a388 going to hkg has a short layover in bangkok
The idea that ME carriers are going to rule the long-haul world is absurd. Nobody from USA is going to fly to ME and backtrack to Asia or Europe, or vice versa. ME carriers may have a lock on lucrative Indian subcontinent and ME regions but that's about it.
The more important question is how many Asian (and European) carriers can survive on a hub/spoke system and where are the optimal locations for hubs....
The idea that ME carriers are going to rule the long-haul world is absurd. Nobody from USA is going to fly to ME and backtrack to Asia or Europe, or vice versa. ME carriers may have a lock on lucrative Indian subcontinent and ME regions but that's about it.
The more important question is how many Asian (and European) carriers can survive on a hub/spoke system and where are the optimal locations for hubs. In Europe we have seen consolidation winnow the key long-haul hubs to London and FRA/MUC with smaller hubs in Paris, AMS/BRU, and STO/CPE. All are relatively central and have good O/D traffic. USA has been reduced to 3 major longhauls and about 50% fewer hubs than 20 years ago. So Asia will similarly shrink.
As others have noted, SIN is not well-located for an Asia hub and long-haul US flights even stop in HKG which is a PITA. NRT, HKG and even ICN are far better suited as hubs. SQ has the same problems as Qantas - not enough O/D and not as central. For years this was okay as the quality of the product brought a premium. But that just isn't working anymore as competitors up their game.
There is support that SQ has some geographical disadvantages, in some respects, and relies for the most part on transit traffic (although important to remember Singapore is a significant regional office location for many trans-nationals, which does create a decent premium traffic demand). However, I don't see this as the major reason SQ is feeling winds of change now (and I agree the title post takes things a bit too far - SQ will never...
There is support that SQ has some geographical disadvantages, in some respects, and relies for the most part on transit traffic (although important to remember Singapore is a significant regional office location for many trans-nationals, which does create a decent premium traffic demand). However, I don't see this as the major reason SQ is feeling winds of change now (and I agree the title post takes things a bit too far - SQ will never just be an intra-Asia carrier). After all, SQ was enjoying many a boom year previously.
No, the real difference is that SQ has been far too reactive and slow to adapt to changing conditions, resting a little too much on it's former laurels. Not having a premium economy cabin when the financial crisis hit really hurt SQ, and it's taken them far too long to realise it's a growth segment. Although an early adopter of the premium features we expect in business and first cabins these days, it's refresh cycles have been far too long and as such it's premium hard product is not as good as some of the best cabins these days. It's also missed the trend of providing more flexibility in cabin service delivery, preferring to fit passengers to their procedures rather than the other way round. Finally, and most importantly, SQ continue to price in a surcharge for their services that is undercut (by good margin often) by similar or better offerings - this was feasible when SQ had bleeding edge product and services, but is very harmful to their business now.
SQ ground services have also taken quite a dip in quality since it's heyday, and their rather insular premium redemption award (and expensive upgrade) policies haven't helped either.
No airline can afford to be complacent these days, and you are only judged on what you have today, not where you stood a decade ago. SQ must be more proactive if it wants to survive, and it certain can be a strong competitor if it's willing to be more adaptive and less hidebound.
SQ has competitive advantage for high quality Economy travel at the moment, but the margins are too thin to get much anywhere. It needs to pick up it's former fight for the premium classes, where margins are fat, if it still wants to be a major player going into the future.
i think for any carrier to survive, they need to build their brand loyalty with customers and especially business and frequent flyers. SQ has made numerous changes to the kris flyer programme that has alienated many members who have swapped out to other programs. while many business travellers i know appreciate good service etc that SQ is famous for, they are not the only carrier offering that. being recognised with the occasional upgrade and a...
i think for any carrier to survive, they need to build their brand loyalty with customers and especially business and frequent flyers. SQ has made numerous changes to the kris flyer programme that has alienated many members who have swapped out to other programs. while many business travellers i know appreciate good service etc that SQ is famous for, they are not the only carrier offering that. being recognised with the occasional upgrade and a good redemption policy will go a long way in keeping regular customers happy and flying with you.
Yes, SQ has some problems, but they won't shrink to a regional carrier or go the way of MH:
1. They are a group, consisting of SQ (full-service, long-haul) SilkAir (full-service, short-haul - not LCC), TigerAirways (40%, short-haul, LCC) and Scoot (regional, LCC). That makes the analysis more difficult, but as a group they are well positioned to be successful! They benefit from each other and as long as the group is doing well...
Yes, SQ has some problems, but they won't shrink to a regional carrier or go the way of MH:
1. They are a group, consisting of SQ (full-service, long-haul) SilkAir (full-service, short-haul - not LCC), TigerAirways (40%, short-haul, LCC) and Scoot (regional, LCC). That makes the analysis more difficult, but as a group they are well positioned to be successful! They benefit from each other and as long as the group is doing well financially, they'll keep going...
2. Singapore is (at least from an air transportation perspective) the best run government in the region - and will continue to support SQ and keep Changi humming...they expand, upgrade and modernize terminals BEFORE they reach capacity or people complain - not ten years later...
3. They are expanding into India and have strong links into China. They are part of ASEAN, with a population of more than 600M (twice US or Europe) and fast growing. The ASEAN integration will deregulate flights, slowly maybe, but it will happen - giving them a much bigger home market than most... SQ is better positioned than the other regional airlines to take advantage of that market.... because...
3. SQ is an admired brand - while many people in the region might fly their local or budget carrier today, they aspire to fly SQ - just like Apple, they will be able to charge a premium for that (if not as much of a premium as today)... selfies with a Singapore girl in business class are a lot more impressive back home than a "hot seat" on AirAsia!
I wouldn't worry too much about your KrisFlyer points at this time...
Singapore strives and depends as a hub and a transit hub. It's so important to Singapore that one could look at how much money they put in their airports (and the airports of the future). Heck, SIA is part of Singapore's identity.
I think the government should (and will) step in and help SIA out (atleast on the longhaul market). There's no way anyone would allow to SIA to shrink so far as a regional...
Singapore strives and depends as a hub and a transit hub. It's so important to Singapore that one could look at how much money they put in their airports (and the airports of the future). Heck, SIA is part of Singapore's identity.
I think the government should (and will) step in and help SIA out (atleast on the longhaul market). There's no way anyone would allow to SIA to shrink so far as a regional airline. There's too much pride and dependency on SIA to allow that to happen. #SaveSIA!
As you mentioned, carriers are coming out successful in pairs. The US3, the ME3, IAG, LATAM Group. Southern and eastern Asia yet to see this shuffle it seems. Southeastern Asian carriers it appears are struggling to compete with the ME3 and the LCCs in their region. While the ME3 and US3 seem to have some strategy dealing with their LCCs and have some balance, Asian carriers yet to make there place.
It was all fun...
As you mentioned, carriers are coming out successful in pairs. The US3, the ME3, IAG, LATAM Group. Southern and eastern Asia yet to see this shuffle it seems. Southeastern Asian carriers it appears are struggling to compete with the ME3 and the LCCs in their region. While the ME3 and US3 seem to have some strategy dealing with their LCCs and have some balance, Asian carriers yet to make there place.
It was all fun and games in the early 2000s when Singapore, Thai, and MAL could just put an outstanding premium product on their metal but now Emirates and the government owned and operated Chinese carriers are taking stake and it's a new game.
I don't think Singapore really has any opportunity to become a regional carrier like MAL might but things will change. Just my opinion but I see Singapore going more the way Emirates and MAL by putting bare bones a/c with some J and Y on the least profitable routes. Singapore could also come to the realization that their amazing hard products aren't profitable.
Though I think Singapore could shift gears to become more like BA or other European carriers on long haul in order to get those routes profitable and less like Etihad or Qatar.
from the west coast to India it's two stops on SQ vs one on EK. Furthermore there is a long and potentially painful layover in SIN depending on which flight you take from LAX.
India is a huge market but it is slowly migrating to EK based on convenience.
It should also consider offering routes passing through Beijing or Shnaghai as that's where the traffic is rather than ICN or NRT
@Loz - Singapore will continue to flourish as a city, but singapore airlines does not have a good future in long haul flights.
Most of the Ultra Long Haul routes operated by the ME3 take a polar route to North America. Singapore is too close to the equator to realize value out of the polar route. Singapore is geographically to the south of the population centers in Indian sub-continent and China - both rapidly...
@Loz - Singapore will continue to flourish as a city, but singapore airlines does not have a good future in long haul flights.
Most of the Ultra Long Haul routes operated by the ME3 take a polar route to North America. Singapore is too close to the equator to realize value out of the polar route. Singapore is geographically to the south of the population centers in Indian sub-continent and China - both rapidly developing economies with a rising middle class. People here would never want to connect via Singapore to other leading economic centers in Europe and North America due to the significantly longer travel time. Singapore airlines would also also have to spend more fuel per passenger on these routes and so will have to charge more per passenger on these routes and end up pricing themselves out of the competition.
That's exactly the reason why SQ has an airline in India, named Vistara.
Once they get international flying permit, they can have Delhi as hub and can fly direct to anywhere in U.S. You have to understand that ~30% pax flying from Dubai to US on Emirates are from India.
But the real question is will SQ want Vistara as a bigger brand than SIA? Am sure they are thinking about it
@Robbie - Couldn't agree more. The question posed by the post title borders on absurd.
No, would be the correct answer. Refer to Loz's posts for some of the detail. But just to keep it short and sweet; as someone who is privy to the finer details of the asset given my position with Temasek, it would be kept afloat regardless. That said, we are a long way away from such a scenario, despite the hyperbole.
@Loz gave a very insightful analysis and I tend to agree with it. SQ's long-haul routes will not be going away any time soon. Actually, I would not be surprised if SQ expands its long-haul offerings once it takes delivery of the a350.
And just this morning I read a news article about SQ's plans to develop a new suite class to compete with EY's present and EK's future products.
Singapore was the first of the luxury, long haul carriers as far as I am concerned. I flew them several times when they had their non-stops from LAX and SFO. They really don't have to do anything but add more US Gateways. i think they only started losing money when they did away with those and were trying to compete with US carriers. Being in a FF group , One World, SkyTeam, Star Alliance would...
Singapore was the first of the luxury, long haul carriers as far as I am concerned. I flew them several times when they had their non-stops from LAX and SFO. They really don't have to do anything but add more US Gateways. i think they only started losing money when they did away with those and were trying to compete with US carriers. Being in a FF group , One World, SkyTeam, Star Alliance would help too. As far as I know, they were always stand alone. They can be competitive if you factor out the connecting RT flight.
SQ is at a geographical disadvantage compared to CX. The ME3 are killing SQ. QR has been using the A359 into SIN to capture the premium market with amazing fares. I was flying out of HKG the the other day. EK has 4 daily to HKG. 3 of them on A388s and 1 77W. They seemed to be going out full! Fortunately, HKG isn't as impacted as much as SIN from the ME3 due to geography.
@AnonCHI I doubt it. Singapore and the MidEastern hubs are not in the same league. Take the ME3 and the hub component away out of the MidEast and the UAE + Qatar might not amount to much, but Singapore is more than just a hub, it's also a major financial centre and an offshore tax haven. We're quite well-positioned to capitalise from India, China and Indonesia's growth and won't stagnate once they get smarter, quite...
@AnonCHI I doubt it. Singapore and the MidEastern hubs are not in the same league. Take the ME3 and the hub component away out of the MidEast and the UAE + Qatar might not amount to much, but Singapore is more than just a hub, it's also a major financial centre and an offshore tax haven. We're quite well-positioned to capitalise from India, China and Indonesia's growth and won't stagnate once they get smarter, quite the opposite actually. No matter how smart or developed the aforementioned countries may be there'll always be demand for a politically stable, neutral, and regional financial hub with a proven track record, and it's evident from the way Switzerland still attracts people from all over the globe. While it is true that Singapore's economy strongly hinges on the survival of its aviation industry (which will remain strong for quite a long time to come), the country is rising steadily in other areas such as its importance as a financial centre and will continue to do so esp. if you factor in political uncertainty in other financial centres in the region - HK's uncertain future after 2048, the volatile situation in the MidEast, and so on.
As I mentioned before, you have to understand the nature of the country and perhaps be on the ground to truly understand what the future may hold and the optimism in the air. I highly doubt a place that's smack in the middle of a re-emerging Asia will ever diminish in importance, but I suppose we can never really predict the future anyway. Cheers
On Middle Eastern Carriers competing, I wish Emirates would fly to GUM. They already fly to most Asian cities close to GUM, it would not be all that difficult to add a MNL-GUM-MNL, ICN-GUM-ICN, HKG-GUM-HKG, JAPAN-GUM-JAPAN route using their large aircraft. GUM just opened a new runway at 12K feet long so Emirates flying here is possible. I say this because there is a lot of local/tourist traffic to all of these cities (more so...
On Middle Eastern Carriers competing, I wish Emirates would fly to GUM. They already fly to most Asian cities close to GUM, it would not be all that difficult to add a MNL-GUM-MNL, ICN-GUM-ICN, HKG-GUM-HKG, JAPAN-GUM-JAPAN route using their large aircraft. GUM just opened a new runway at 12K feet long so Emirates flying here is possible. I say this because there is a lot of local/tourist traffic to all of these cities (more so MNL and ICN) and this would be a great way for true competition to drive the fares. But idk, perhaps there are prohibitions, such as cabotage given GUM is a U.S. Territory?
I don't buy the argument that almost all long-haul routes are loss making. I have been flying FRA-SIN-FRA quite frequently recently and those flights are full. On certain days you can't even get a business class seat. And given their ambitious prices, I don't see how they can be loosing money on that route.
SQ has punched far above its weight for a long time. The world only has room for so many ULH-oriented carriers based in countries with minimal O&D demand. EK, EY, and QR have shown that due to the growing importance of the Indian subcontinent, they are far better geographically positioned to serve it. Sure SQ could think of how to connect the Indian subcontinent with Southeast Asia and Oceania but the traffic there is nothing...
SQ has punched far above its weight for a long time. The world only has room for so many ULH-oriented carriers based in countries with minimal O&D demand. EK, EY, and QR have shown that due to the growing importance of the Indian subcontinent, they are far better geographically positioned to serve it. Sure SQ could think of how to connect the Indian subcontinent with Southeast Asia and Oceania but the traffic there is nothing compared to India - Europe/US traffic.
Furthermore, as another commenter mentioned, SQ pricing is generally substantially above its competitors.
At the end of the day, what will end the dominance of the Gulf 3 will be (a) more aircraft like the 787 that make long-thin routes work and (b) a smarter, better aviation industry in India. Imagine if AI actually had its act together and used DEL as a real hub (and if DEL was actually better designed to be a hub with better transit security procedures and less walking between gates).
Countries like UAE and Singapore are built on having crappily-run, populist, corrupt major countries in the area (India, Pakistan, Malaysia, Indonesia, etc. China was once part of that pool). Once those much bigger countries figure out how to be smarter, UAE and Singapore will likely go back to being far less important in the world once the talent flows out. Until then, they should milk it for all its worth.
The 380 was exactly the wrong aircraft for them, they would be in a much better position to compete with on routes with 350's or 789/8's
I'm a little surprised but not shocked. The Gulf 3 have strategic advantages now that airliners can go longer (but not quite long enough for Singapore) and still funnel mid and short range traffic between Europe, Asia, Africa, North America, and soon even South America. Singapore and other "amazing First Class carriers" are not apparently making the profits that the "terrible" American legacy 3 are making. It seems that the American legacy 3 are not...
I'm a little surprised but not shocked. The Gulf 3 have strategic advantages now that airliners can go longer (but not quite long enough for Singapore) and still funnel mid and short range traffic between Europe, Asia, Africa, North America, and soon even South America. Singapore and other "amazing First Class carriers" are not apparently making the profits that the "terrible" American legacy 3 are making. It seems that the American legacy 3 are not making bad business decisions, after all, based on the markets available to them, despite all the rhetoric and whining about them compared to the "superior" but largely unprofitable foreign carriers.
"In particular, he highlighted that SIA’s long-haul routes have been almost consistently loss-making since FY09 as its competitors have refined their strategy and successfully established themselves into SIA’s markets."
And where did Mr. Mohshin Aziz get this information from? I wouldn't trust Yahoo Finance for financial insight. It's easy to review SIAs financials that are readily available on their website.
Every time I look-up a long-haul flight in First, Singapore are easily the most expensive and by a large amount. I don't know if they're still filling the cabins, but I very much doubt if it they're not profitable as Business and First is where the airliners make their money. When it's a case of paying £4k to fly with BA (or Etihad/Emirates via UAE) or £7k to fly with Singapore and you're paying for 2 people, it's a simple financial decision not to fly with them.
Tricky that cathay still focus on long hail market
I'm really excited to fly Singapore for the first time next spring. My husband and I are taking a short-haul flight from BKK to SIN, and even though it's economy, I'd heard nothing but great things.
re: your first paragraph: I was also really confused that when researching flights between Hanoi and Bangkok, one of the options for a reasonably priced, direct flight was Qatar Airways.
There are still lots of markets they are well-poised to take advantage of that aren't necessarily regional routes like Indian subcontinent to North Asia or Indian subcontinent to Australia. They're losing their grip on Australia to Europe traffic but that doesn't mean they're done for in the long haul market. And I have trouble believing that routes like LHR were unprofitable, given they were constantly upgauging.
This does seem to be an issue of geography. As perfectly situated as it is for other means of transportation and shipping, certainly it is severely lacking in regards to its location relative to other hubs/airlines. This has been apparent for years even to me who doesn't pay attention to the airline industry. The LAX-SIN and NYC-SIN route, when they existed, were always on the list of the longest flights in the world. Usually right...
This does seem to be an issue of geography. As perfectly situated as it is for other means of transportation and shipping, certainly it is severely lacking in regards to its location relative to other hubs/airlines. This has been apparent for years even to me who doesn't pay attention to the airline industry. The LAX-SIN and NYC-SIN route, when they existed, were always on the list of the longest flights in the world. Usually right at the top.
Dubai, Abu Dhabi, Doha, Hong Kong and Tokyo are infinitely more convenient to flights to/from the United States, still the world's most important economy. Is there a single market you can't fly to from Dubai? Maybe Sao Paulo pushes the limits. But that demonstrates the point. I can fly ORD-DXB-ANYWHERE on Emirates. Just to get to Singapore's hub I'd have to make an extra stop in LA, SFO, ICN, NRT, HKG, etc.
Cathay Pacific doesn't have the same problem, nor do the Korean, Chinese or Japanese airlines. The MIddle Eastern airlines don't, nor do the European ones except to maybe Australia. Malaysian did/does, Singapore does, Thai does.
When planes get more efficient than they are now, then maybe the equation changes. Until then, they'll struggle for no other reason than location, location, location.
"If they can have like 4 flights to NYC direct daily, I am sure they can fill it up as well"
The problem is that Singapore is not a particularly awesome place to have a longhaul hub compared to Dubai, except for maybe Australia/NZ (which is a region of ~30 million people, chump change compared to the population in easy reach of Dubai).
SQ's biggest handicap at the moment is their inability to find a viable option to fly to US directly. Once they solve this issue, they will be quite a different animal. (Especially if they can fly direct to NYC again)
If they can have like 4 flights to NYC direct daily, I am sure they can fill it up as well.
Long haul is not dead for them. The biggest long haul that they wanted, is not awake at the moment.
With the potential of Singapore Airlines shrinking to a regional market, would you say it would be wise to no longer transfer points to Krisflyer? Been wanting to fly Singapore air suites and save up enough points for the future, but I don’t want them to be stuck there while they downsize.
Singapore simply does not have a large enough market to be a major long haul carrier. Australia has too small a population and Indonesia does not have too many long haul passengers. The geographic location of the ME3 Hubs suits travellers from the Indian Subcontinent much better. Each ME3 carrier offers direct flights to 10-12 cities in India (And the list is growing) while Singapore offers to only 6.
@Andrew - I believe you are...
Singapore simply does not have a large enough market to be a major long haul carrier. Australia has too small a population and Indonesia does not have too many long haul passengers. The geographic location of the ME3 Hubs suits travellers from the Indian Subcontinent much better. Each ME3 carrier offers direct flights to 10-12 cities in India (And the list is growing) while Singapore offers to only 6.
@Andrew - I believe you are referring to DFW-DXB and not DAL-DUB. Emirates upgrades from a 777-300 to a larger A380 for this route last year. Passenger loads on this route are definitely not light.
Not going to happen it is their one thing that spreads the brand of Singapore.. they will fund it to its death. THey might reduce frequency of flights AND did you know they started hiring trainee pilots again after a long hiatus....
I acknowledge that SIA as a company is in trouble, but your headline is misleading. Singapore Airlines will never become a 'regional carrier' when Singapore's very future hinges on its ability as a global aviation powerhouse. Singapore will never go the way of Malaysia. Malaysia is a corrupt country plagued by inefficiency and that was one of the main reasons why MAS went bust, while Singapore runs like a dream for the most part. To...
I acknowledge that SIA as a company is in trouble, but your headline is misleading. Singapore Airlines will never become a 'regional carrier' when Singapore's very future hinges on its ability as a global aviation powerhouse. Singapore will never go the way of Malaysia. Malaysia is a corrupt country plagued by inefficiency and that was one of the main reasons why MAS went bust, while Singapore runs like a dream for the most part. To understand SIA you have to understand the way Singapore functions as a country - the government places the utmost emphasis on the country's strong brands, like SIA and Changi Airport, to name a few, and will do whatever it can to keep SIA afloat even if it means digging into the government's coffers until they figure out a way to stop SIA from haemorrhaging money (and they will figure it out - Singapore was turned from a swamp into a world-class city in just a couple of decades and SIA's problem is nothing compared to the challenges the govt. has faced in the past). The government just agreed to finance Changi's expansion which will come up to roughly 50 billion dollars or so, and the cost of keeping SIA afloat will be peanuts in comparison. SIA is more than just an airline, it's a national icon for us and one of our most effective forms of soft power, and there's simply no way it'll ever be relegated to serving regional routes. It's impossible.
I have felt for some time Singapore Airlines best days are behind it. Singapore itself is not in the best location for a hub as you have to backtrack to most of Asia if you are traveling from the USA or Europe.
With the rise of the ME3 and planes like the 787 and A350 where airlines can fly more direct routes I think Singapore is at a long term disadvantage. No wonder their Krisflyer...
I have felt for some time Singapore Airlines best days are behind it. Singapore itself is not in the best location for a hub as you have to backtrack to most of Asia if you are traveling from the USA or Europe.
With the rise of the ME3 and planes like the 787 and A350 where airlines can fly more direct routes I think Singapore is at a long term disadvantage. No wonder their Krisflyer miles are so easy to get.
I suspect Singapore would like to find some airplane configuration to make the USA a nonstop destination again.
@ Rob
My guess would be the routes that they have little to no competition on... Like LAX/SFO (and maybe IAH) to SIN. The ME3 are really more positioned for the the kangaroo route, not trans-pac flying.
@Andrew @ Lucky - I don't believe the load on the Emirates and Etihad are light, at least not on the award seats. Contrary to Lucky and Tiffany's constant touting of how easy it is to get seats, it's almost impossible to find an award seat on Emirates and Etihad on Guess Business or First at the regular award redemption price.
I think their capacity management group have wizened up to all the folks taking the freebies :)
And the Middle Eastern carriers are still growing at quite a pace with strong financial backing to run SQ into the ground on competing routes.
Singapore itself is a financial and trade hub of the world so I can see a downsized version being sustainable, but to serve Singapore only. I can't see it surviving as a transit hub.
Whoops, that's my not paying attention. Anyway, it would be a real tragedy for those of us who love SIA to see them axe their long-haul routes... they must have their A380s for a while yet, so they won't be able to just get rid of them anytime soon, I'm guessing.
I wonder which ones make profit?
I think this begs the questions how are Middle Eastern airlines able to be so competitive then? The vast majority of their network are long haul routes, and we know in many cases their passengers loads are very light on these routes (Emirates DAL - DUB for example). I would have pegged Singapore as the most comparable airline to the ME3 carriers. If I were CEO of the big three US airlines, I'd be on the phone with Singapore about joining the open skies battle.
"They’re already taking steps to adopt to the market, by introducing premium economy, and by competing with low cost carriers through Silk Air and Scoot."
Singapore Airlines owns both SilkAir and Scoot, if I'm not mistaken.
@ Rob -- Sorry for any confusion, that was my point. They have SilkAir and Scoot to compete with other low cost carriers.