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Is A SQ Hub In The Middle-East Feasible?  
User currently offlineYokoTsuno From Singapore, joined Feb 2011, 348 posts, RR: 0
Posted (3 years 6 months 5 days 22 hours ago) and read 6253 times:

An article entitled "Fast Growth of Gulf Air Carriers Worries Rivals" appeared in the Sunday Times of Singapore today.

http://www.thejakartaglobe.com/busin...air-carriers-worries-rivals/425374

One analyst suggested that EK and the likes pose a serious threat to SQ, far more than the EU/US carriers. I agree with this view for the obvious reasons.
- Geographical position of SQ's hub.
- EK's business model makes it a direct competitor to SQ.

To face of the competition the analyst suggests SQ to set up a hub in the Middle-East. Assuming this is politically feasible, where would that hub be? Personally I could not imagine SQ successfully operating a hub in Dubai or Abu Dhabi with such EK dominance. Jet Airways operates a hub in BRU but that's in absence of a prominent national carrier.

18 replies: All unread, jump to last
 
User currently offlineinitious From Singapore, joined Dec 2008, 1060 posts, RR: 15
Reply 1, posted (3 years 6 months 5 days 22 hours ago) and read 6189 times:

I guess if SQ operates a myriad of fifth freedom routes on their new products (those on 77W, A380, A330), it has a good chance of beating what the other Gulf carriers like QR, EK and EY has. SQ is a very established brand and even those who have not heard of Singapore has heard of SQ.

Other than the AUH-JED and AUH-KWI sector which are flown by the A333 with the new products, the DXB routes are pretty much with the old products (773, 772) and some of them don't even have AVOD. It might not matter to some as their mindset is SQ = the best (referring to Singaporeans). I suppose SQ could make routes like DXB-DOH, DXB-RUH, DXB-MCT just to name a few.

However, I do not foresee this happening in the near future and I'm sure EK, EY and QR will do everything to ensure that SQ stays out of their home grounds.



One way I will fly around the world!
User currently offlineCXfirst From Norway, joined Jan 2007, 3061 posts, RR: 1
Reply 2, posted (3 years 6 months 5 days 21 hours ago) and read 6047 times:

I just don't think SQ would be interested in that. In order to successfully start a Middle Eastern Hub, they would need to dedicated quite a few airplanes into the new operation, this would be taken away from their hub in SIN.

It is not cheap to start a new hub, and I think it would be best for SQ to focus on SIN, route traffic through there, like they have always been doing. They shouldn't over-complicate their operation.

-CXfirst



From Norway, live in Australia
User currently offlineQuokka From , joined Dec 1969, posts, RR:
Reply 3, posted (3 years 6 months 5 days 20 hours ago) and read 5978 times:

I think that SQ will be focusing on building traffic in the rapidly growing markets of South and East Asia. Whether SQ could realistically establish a hub in GCC countries would be limited by what agreements Singapore has with their respective countries and the countries to which they intended to convey passengers.

While the UAE may not object to SQ starting up flights from AUH or DXB, such flights might violate other bilateral agreements by which SQ may be bound. Tim Clarke at EK is on the public record as saying that they welcome competition in Dubai and I can't see the owners of DXB complaining about the extra revenue flights would bring. And that's not even considering the new airport that is at present only open for cargo.

Interesting comment at the time from Singapore's Transport Minister ,Yeo Cheow Tong, following the signing of an "open skies" agreement with the UAE; "We can't stop them from growing so we might as well see how we can leverage from their growth to benefit Changi." Here the Minister was clearly thinking about what benefits Singapore and not just SQ.
http://www.arabianbusiness.com/uae-s...apore-agree-open-skies-135710.html


User currently offlineflyingalex From Germany, joined Jul 2010, 1016 posts, RR: 0
Reply 4, posted (3 years 6 months 5 days 20 hours ago) and read 5956 times:

Quoting CXfirst (Reply 2):

It is not cheap to start a new hub, and I think it would be best for SQ to focus on SIN, route traffic through there, like they have always been doing. They shouldn't over-complicate their operation.

Agreed, and I don't think the Gulf carriers are hurting SQ that badly. They overlap on European routes and on the Kangeroo route, but this still leaves SQ with plenty of alternatives. For one thing, there's north-south traffic from Asia to Australia. Then there's trans-Pacific traffic they can carry.

In addition, SQ caters heavily to high-spend travellers (premium leisure travellers and business travellers) who would be disinclined to take a detour via the Gulf. And that's before we even start talking about the chaos at DXB, DOH and AUH during their main connecting banks, which rather detracts from a premium experience.



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User currently offlinepar13del From Bahamas, joined Dec 2005, 7149 posts, RR: 8
Reply 5, posted (3 years 6 months 5 days 20 hours ago) and read 5903 times:

The Middle East carriers are doing what SQ did many years ago, leverage their geographic position with current a/c technology, why would they allow SQ into the region as a hub competitor?
Look at the difficulties that EK or European carriers are having in operating more flights into each other's territory even though cultural, political and financial links between the regions are strong and long, now imagine SQ?
They can certainely build up a number of flights but like what is taking place elsewhere, they will not be allowed to get so large as to threaten the incumbents.


User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1488 posts, RR: 0
Reply 6, posted (3 years 6 months 5 days 17 hours ago) and read 5574 times:

Quoting flyingalex (Reply 4):
Agreed, and I don't think the Gulf carriers are hurting SQ that badly.

SQ must have been hit on its traditional kangaroo route services. If you look at the growth in flights operated by the Gulf airlines over the kangaroo route and look at how little SQ's route network ex-UK/Europe has changed then there must have been a diversion in traffic. Do not forget that the Gulf airlines serve more points in the UK/mainland Europe/Scandinavia compared with SQ.

Quoting flyingalex (Reply 4):
In addition, SQ caters heavily to high-spend travellers (premium leisure travellers and business travellers) who would be disinclined to take a detour via the Gulf.

Yes, flying via the Gulf adds to journey time if you are departing from a main airport in the UK/mainland Europe. But if departing from a secondary airport like NCL, BHX, DUS, HAM, VCE, GVA etc then the Gulf carriers may offer a quicker way of reaching SE Asia or Australia/NZ than SQ.

Look at the situation for Mancunians. If a traveller chooses EK or QR from MAN he or she can fly one-stop to SYD and/or MEL via DXB. If the same traveller chooses SQ he or she is routed MAN-MUC-SIN before the final leg to MEL or SYD.


User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 7, posted (3 years 6 months 5 days 13 hours ago) and read 5263 times:

Quoting LondonCity (Reply 6):
Yes, flying via the Gulf adds to journey time if you are departing from a main airport in the UK/mainland Europe.

Sorry, but what are you classing as a 'main airport' in the UK.....and from your example you seem to be only stating MAN, yet if from LHR? it would make no difference whatsoever?

Quoting par13del (Reply 5):
The Middle East carriers are doing what SQ did many years ago, leverage their geographic position with current a/c technology, why would they allow SQ into the region as a hub competitor?
Look at the difficulties that EK or European carriers are having in operating more flights into each other's territory even though cultural, political and financial links between the regions are strong and long, now imagine SQ?
They can certainely build up a number of flights but like what is taking place elsewhere, they will not be allowed to get so large as to threaten the incumbents.

   exactly correct......and I don't understand this fascination some seem to have concerning some mythical 'threat' by the Gulf carriers. As you have correctly stated, such simply doesn't exist.


User currently offlinejfk777 From United States of America, joined Aug 2006, 8341 posts, RR: 7
Reply 8, posted (3 years 6 months 5 days 11 hours ago) and read 5135 times:
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It would make no sense for them to have a persian gulf hub.

User currently offlineLondonCity From United Kingdom, joined Nov 2008, 1488 posts, RR: 0
Reply 9, posted (3 years 6 months 5 days 11 hours ago) and read 5075 times:

Quoting AirNZ (Reply 7):

Sorry, but what are you classing as a 'main airport' in the UK.....and from your example you seem to be only stating MAN, yet if from LHR? it would make no difference whatsoever?

True, but not everyone wants or, indeed, needs to fly ex-LHR. There are many passengers who prefer and use airports like LGW and BHX to fly long-haul via the Gulf rather than face LHR.


User currently offlineYokoTsuno From Singapore, joined Feb 2011, 348 posts, RR: 0
Reply 10, posted (3 years 6 months 5 days 10 hours ago) and read 4952 times:

Quoting par13del (Reply 5):
why would they allow SQ into the region as a hub competitor?


Why would European airlines allow Jet Airways into BRU?

Quoting LondonCity (Reply 6):
SQ must have been hit on its traditional kangaroo route services.


I have the same feeling. They probably did not lose in absolute figures but very likely in market share,

Quoting LondonCity (Reply 9):
There are many passengers who prefer and use airports like LGW and BHX to fly long-haul via the Gulf rather than face LHR.


That is one of the reasons why I am using EK. If one can't get to a destination without a connecting flight personally I feel connecting halfway is still more comfortable than 30 minutes from your destination. The latter can be very very frustrating.


User currently offlineLufthansa From Christmas Island, joined May 1999, 3213 posts, RR: 10
Reply 11, posted (3 years 6 months 5 days 10 hours ago) and read 4875 times:

While the concept of SQ setting up a hub in the gulf has some ideas, they are basically going to be restricted to
5th freedom services. Problem... EK can fly somebody down to DXB and then directly onto tokyo, hong kong, sydney etc.... SQ will have to send them to singapore first. It might manage to get traffic rights between say DXB and a whole stack of secondary european ports, but it wont be able to take them from DXB to their destination nonstop.

I would say the 787 should improve things because it should allow SQ to start service to some secondary european cities... but the essential problem still remains that the Gulf carriers have a geographic advantage, which will allow them to send larger aircraft with lower CASM. Somebody going from Glasgow to India or South Africa Can help fill those 77Ws and help add frequencies.

Another problem Singapore faces...is even though lots of south east asia is booming...Singapore is still very south, to tap into in particualar the China market as a connection point. It really only works for chinese going to Australia, South Africa, malaysia or indonesia. Hong kong is a bit btter placed.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25170 posts, RR: 22
Reply 12, posted (3 years 6 months 5 days 8 hours ago) and read 4355 times:

Quoting YokoTsuno (Reply 10):
Why would European airlines allow Jet Airways into BRU?

It's not the airlines that allow a carrier into BRU but the Belgian government (don't believe they have one at the moment!) And there is no Belgian longhaul carrier operating BRU-USA/Canada or BRU-India, and a seriously underutilized airport since Sabena went bust.


User currently offlineOP3000 From United States of America, joined Jun 2009, 1764 posts, RR: 2
Reply 13, posted (3 years 6 months 5 days 7 hours ago) and read 4009 times:

Between EK, EY and QR I think there is already too much infrastructure capacity in the Middle East long-haul hub segment, and too much backing from their respective owners to fend off a big challenger. A more likely scenario is that in the longer-term future one of these carriers' owners loses the interest or ability to further grow/manage an operationally-demanding airline, and then seeks a competent Asian or European partner like SQ, LH or BA with use for a Gulf hub/carrier.

[Edited 2011-02-27 17:31:01]

User currently offlineflyingalex From Germany, joined Jul 2010, 1016 posts, RR: 0
Reply 14, posted (3 years 6 months 4 days 22 hours ago) and read 2539 times:

Quoting YokoTsuno (Reply 10):
That is one of the reasons why I am using EK. If one can't get to a destination without a connecting flight personally I feel connecting halfway is still more comfortable than 30 minutes from your destination. The latter can be very very frustrating.

I disagree. I prefer having one long flight where I can settle in and (try to) sleep, so I'd take the short flight-long flight or long flight-short flight options over a medium flight-medium flight option. This is the case when I'm in Economy, but even more so if I'm sitting towards the pointy end of the aircraft.

Besides, I find that EK's connection banks are always at the worst possible time for my body clock. When flying EK, without fail, I'll be wandering through DXB at a time when all I really want to do is sleep. Same thing, different airport for the other Gulf carriers.



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User currently offlineSR4ever From Luxembourg, joined Mar 2010, 800 posts, RR: 1
Reply 15, posted (3 years 6 months 11 hours ago) and read 2015 times:

Quoting YokoTsuno (Thread starter):
Assuming this is politically feasible, where would that hub be?

DXB and AUH are full, DOH hardly more favourable.

KWI and BAH would make more sense, especially as KU and GF acompete in a lower rank than EK, EY and QR.


[

Quoting Quokka (Reply 3):
While the UAE may not object to SQ starting up flights from AUH or DXB, such flights might violate other bilateral agreements by which SQ may be bound.

SQ would have to set up a local subisdiary such as Singapore Airlines Gulf, locally-owned and managed, yet operating the SQ brand as a franchisee.

Quoting LondonCity (Reply 6):
SQ must have been hit on its traditional kangaroo route services. If you look at the growth in flights operated by the Gulf airlines over the kangaroo route and look at how little SQ's route network ex-UK/Europe has changed then there must have been a diversion in traffic.

Agreed, but this traffic is not that high-yielding, meaning SQ can make higher profits than EK on the Kangaroo route.

Quoting LondonCity (Reply 6):
Look at the situation for Mancunians. If a traveller chooses EK or QR from MAN he or she can fly one-stop to SYD and/or MEL via DXB. If the same traveller chooses SQ he or she is routed MAN-MUC-SIN before the final leg to MEL or SYD.

Sooner or later, SQ will fly SIN-MAN nonstop.

CX via HKG could also be a good alternative.

Quoting Lufthansa (Reply 11):
I would say the 787 should improve things because it should allow SQ to start service to some secondary european cities...

It should, indeed.

SQ could also team up with TK within Star, and use IST has a Eurohub.

Quoting Viscount724 (Reply 12):
It's not the airlines that allow a carrier into BRU but the Belgian government (don't believe they have one at the moment!) And there is no Belgian longhaul carrier operating BRU-USA/Canada or BRU-India, and a seriously underutilized airport since Sabena went bust.

Agreed.

And as far as I remember, SN code-shares with 9W on those BRU-North America routes.


User currently offlineblueflyer From United States of America, joined Jan 2006, 3971 posts, RR: 2
Reply 16, posted (3 years 6 months 10 hours ago) and read 1965 times:
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Quoting SR4ever (Reply 15):
DXB and AUH are full, DOH hardly more favourable.

Isn't the new airport expected to relieve congestion at DXB?

Quoting SR4ever (Reply 15):
KWI and BAH would make more sense

I think it'll be a while before anyone considers investing in Bahrain, fancy advertising or not.

Quoting flyingalex (Reply 14):
I prefer having one long flight where I can settle in and (try to) sleep

I agree wholeheartedly. I'll take an ULH and a 30 min hop over two 8-hour flights any day. I can unpack laptop, Nook, magazine or whatever else I need, settle in, work, eat and sleep all a single flight rather than have to repeat the process over two flights.

Quoting Viscount724 (Reply 12):
It's not the airlines that allow a carrier into BRU but the Belgian government

And therein lies the crux of the problem if SQ tried to set up shop in the Gulf. What with the home-grown carriers, the various Gulf governments have no incentive to make it easy, or room, for SQ. With Sabena gone and no prospect of Brussels Airlines going into any long-haul other than Africa, there was nothing to lose for Belgium.

Quoting YokoTsuno (Thread starter):
Jet Airways operates a hub in BRU but that's in absence of a prominent national carrier.

BRU isn't a good model. For one thing it was intended to solve a totally different issue, namely the inability to find an Indian airport with both the infrastructure and space to operate this hub from, where domestic flights would feed international flights. As other carriers are able to fly direct between the US and Indian, I don't think Jet is finding their scissor hub as successful as expected. Not only has capacity has been reduced from what it was at the launch but there may not be much room for Jet to add new routes even if they intended to (as I recall, initial plans called for flights to five Indian cities). Absence of Sabena notwithstanding, BRU's non-Schengen pier is actually quite busy in the morning. with little room to grow other than by using remote stands (a delight in Belgian weather).



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User currently offlineYokoTsuno From Singapore, joined Feb 2011, 348 posts, RR: 0
Reply 17, posted (3 years 6 months 8 hours ago) and read 1871 times:

Quoting SR4ever (Reply 15):
DXB and AUH are full, DOH hardly more favourable. KWI and BAH would make more sense, especially as KU and GF compete in a lower rank than EK, EY and QR.


I know that I am going to get some negative answers here, but what about AMM. I once transited there on a flight to Europe with Royal Jordanian. The airport wasn't in very good shape at the time but there seemed to be plenty of room for expansion.I guess DXB did not look any different a few decades ago. I am unfamiliar with the local political situation but Jordan seems to be far more stable than the surrounded countries.

Quoting blueflyer (Reply 16):
BRU's non-Schengen pier is actually quite busy in the morning. with little room to grow other than by using remote stands (a delight in Belgian weather).

I thought I always saw construction work going on there. Aren't they expanding this place with an additional terminal, pier or something?

Quoting blueflyer (Reply 16):
I agree wholeheartedly. I'll take an ULH and a 30 min hop over two 8-hour flights any day. I can unpack laptop, Nook, magazine or whatever else I need, settle in, work, eat and sleep all a single flight rather than have to repeat the process over two flights.

If everybody would think like that DXB would not even exist. When you look at the number of "Europeans" and Asians transiting there it's obvious that many don't mind.


User currently offlineblueflyer From United States of America, joined Jan 2006, 3971 posts, RR: 2
Reply 18, posted (3 years 5 months 4 weeks 1 day 2 hours ago) and read 1513 times:
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Quoting YokoTsuno (Reply 17):
Aren't they expanding this place with an additional terminal, pier or something?

There's no room to expand the non-Schengen pier without either moving the main terminal or a runway. Plans to build a new low-cost terminal have been shelved and replaced by plans to expand the Schengen pier and actually turn it into a Star Alliance pier but I don't think there's a firm date to start construction yet.



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