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LAXintl
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SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 3:26 pm

Following announcement of SIA Groups first quarterly loss in 6-years, the group says it will shut down its wholly owned cargo subsidiary and re-integrated cargo flying as a division within SQ airlines.

SIA says move will help improve efficiency as the cargo division has shrunk over recent years and is expected to be completed in the first half of 2018.
The majority of SIA Cargo's nearly 900 employees will be retained in the new cargo division, while some will be transferred to other divisions, the carrier said.

SIA also confirmed the planned freighter fleet will shrink to 7 747-400F frames after removal of 8th frame in April in preparation for return to lessor.

SIA Cargo was formed in 2001 as separate subsidiary with own AOC and operated a peak of 17 747-400Fs at one time.

SIA to re-integrate SIA Cargo to improve efficiency
http://www.businesstimes.com.sg/compani ... efficiency

Singapore Airlines to shut SIA Cargo division
http://www.channelnewsasia.com/news/bus ... on-8863096

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Yet another airlines cargo division shrinking into irrelevancy.

I suspect in the long run, SIA will seek out ACMI capacity from folks like Atlas, just as CX recently opted to do as it continues to shrink its inhouse freighter fleet.
From the desert to the sea, to all of Southern California
 
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readytotaxi
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 3:39 pm

Yep, if you can't make it pay, walk away. Good to see that staff are being kept on.
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behramjee
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 5:01 pm

I assume that these B744Fs are fully paid off by now hence no need to splurge money on purchasing new B77Fs...am I right?
 
skipness1E
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 5:33 pm

They're ancient in SIA fleet terms. Mind you they flew in the SIA AOC for years before SQC. I wonder if they're holding out for end of line B747-8F offer or just give up?
 
trex8
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 6:25 pm

What advantages do these stand alone companies provide compared to being part of the main airline?
 
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LAXintl
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 6:39 pm

behramjee wrote:
I assume that these B744Fs are fully paid off by now hence no need to splurge money on purchasing new B77Fs...am I right?


Of remaining 7 frames, 5 are owned. Remaining 2 are on leases.
Suppose the leased aircraft will go back as terms end. They returned 2 in 2016 and now 1 in April, so they dont seem to have appetite to keep them.

trex8 wrote:
What advantages do these stand alone companies provide compared to being part of the main airline?


Own staff, own set of books/ P&L, reduced risk to parent company, easier to spin off/sell, etc..
I'm sure there were other tax/financial/operational incentives as well to spin it off back in 2001 and set up the cargo company.
From the desert to the sea, to all of Southern California
 
scotron11
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 7:36 pm

Same with BA...got rid of their freighters (wet leased from Atlas) and now just belly freight or contract with QR.
 
airbazar
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 7:54 pm

LAXintl wrote:
trex8 wrote:
What advantages do these stand alone companies provide compared to being part of the main airline?


Own staff, own set of books/ P&L, reduced risk to parent company, easier to spin off/sell, etc..
I'm sure there were other tax/financial/operational incentives as well to spin it off back in 2001 and set up the cargo company.

As far as staff goes, it was the same as SQ. At least crew and maintenance were/are the same.
I suspect that part of the problem that they are having is not having a passenger 744 fleet to spread the costs. Having a subfleet of only 7/8 frames with its own crew and support staff in a time when cargo revenue is in decline, makes for very poor economics.
 
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RL777
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 8:04 pm

I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.
 
77H
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 10:06 pm

RL777 wrote:
I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.


That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H
 
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lightsaber
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 11:00 pm

77H wrote:
RL777 wrote:
I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.


That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H

Belly freight is key. There has for too long been an incentive to design away from main deck. Even the AN-124s are generating less revenue. The new widebodies are really two deck combis: 77W, 789, 78J, A359, and A35K. Even the 788 has much more cargo than prior planes.

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.

Lightsaber
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RL777
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Fri May 19, 2017 11:08 pm

77H wrote:
RL777 wrote:
I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.


That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H


Exactly, underbelly freight is and generally always will be a profitable business due to the fact its supplemental or complimentary to the pax revenue.
 
strfyr51
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 12:00 am

trex8 wrote:
What advantages do these stand alone companies provide compared to being part of the main airline?

Not a thing!! The maintenance is the same if not more, the piloting is the same if not more expensive, the ground handling is the same, There's No real advantage unless you can get crews, ground handling, and Maintenance at a lower cost.
 
CX747
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 1:50 am

More business for Atlas and its 747s.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
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mercure1
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 2:29 am

strfyr51 wrote:
Not a thing!! The maintenance is the same if not more, the piloting is the same if not more expensive, the ground handling is the same, There's No real advantage unless you can get crews, ground handling, and Maintenance at a lower cost.


You are assuming its the same employees. Many cargo subsidiaries have entirely different staff, different seniority list, contracts etc. Same goes for ground staff.
Stand alone ops are often allow for much more nimble enterprise without worry about the heavy overhead that the regular mainline operation might bring.
 
AngMoh
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 3:15 am

lightsaber wrote:
77H wrote:
RL777 wrote:
I'm actually surprised they held out this long, cargo market is going through a bit of a downturn and dedicated freighter fleets across the board seem to all be reducing in numbers.


That is interesting to hear as I was just told that the airline I work for is having the best year in 8 years in terms of cargo revenue and tonnage. It is all belly freight though.

77H

Belly freight is key. There has for too long been an incentive to design away from main deck. Even the AN-124s are generating less revenue. The new widebodies are really two deck combis: 77W, 789, 78J, A359, and A35K. Even the 788 has much more cargo than prior planes.

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.

Lightsaber


SIA states clearly that their cargo capacity has increased by 4-5% even with the reduction of dedicated 747s. It is all into the belly of 777/A330/A350s. And with the A330 going out and A350 coming in, it is going to increase cargo capacity even more.
727 732 733 734 735 73G 738 739 739ER 742 743 744 752 762 772 773 77W 788 A300 A310 A319 A320 A321 A332 A333 A343 A345 A346 A359 A388 DC-9 DC-10 MD11 MD81 MD82 MD87 F70 ERJ145 E175 E190 E195 ATR72 CRJ200 CRJ700 CRJ900 BAE146 RJ85
 
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Coal
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 8:21 am

So to summarize, it's basically more of an organizational redesign, with common resources between SQ and SQC, but the freighters and I assume the name Singapore Airlines Cargo will remain.
Nxt Flts: SQ SIN-CGK-SIN | SQ SIN-DPS | GA DPS-SUB | MI SUB-SIN | MI SIN-KNO | GA KNO-CGK-PNK | GA PNK-CGK | SQ CGK-SIN
 
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readytotaxi
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Re: SIA Cargo to be shut; freighters reintegrate with SQ mainline

Sat May 20, 2017 10:15 am

There has also been a push toward rail, trucks, or ships due to the intense competition driving down rates. I personally think the silk road railroad will cut rates. Sad as an Aviation fan, but economics is brutal.
Lightsaber[/quote]


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