LAXintl
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Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 4:22 pm

With yesterdays thread about Singapore Airlines offering leaves of absence to pilots, and the fact the carrier saw its year over year flying decline 3.4% made me thing about SQ's future strategy.

Unlike much of its regional peers, SQ proper is seemingly not growing, and it looks like increasing volume of group flying will be done by its affiliate carriers in the future.

o Silk Air - Today with about 20 airplanes it for the most part operates complimentary service to SQ, but Silk has order and options for nearly 70 737NG/MAX. Certainly Silk will see massive growth potentially at the expense of SQ mainline flying in the region.
o Scoot - Small today with mere 4 777s, but SQ has stated Scoot would receive upwards of 20 787-9s previously slated for mainline SQ. Overtime growing number of Scoot markets will likely overlap today's SQ routes.
o Tiger - SQ has about 1/3rd ownership stake in the LCC and last fall teamed up Tiger with Scoot to allow for purchase joint flight itineraries. Tiger also has 30 more jets on the way in the next 3-years.

In recent years Singapore has seen a hyper competitive situation with growth of likes of Jetstar and Air Asia having set up shop, plus openskies access from airlines all over the world.

Additionally the growing poaching of historic transit traffic by competitors such as the Gulf carriers has seen SQ lose out in some markets, and has made Changi work harder to maintain its transfer hub attractiveness. For example just last week it launched a promotion of offering 40SGD credit to all transfer SQ/Silk passengers to spend at airport retailers.

Certainly Singapore Airlines is one of the industries great brands, but in someway it seems to me its been in almost a holding pattern these last few years and the luster maybe fading a bit.

So with lots of low and high end competition nibbling away, and relative high cost base, what can SQ do?
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longhauler
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 4:27 pm

It was really only a matter of time before what has been brewing all over the world, spread to Singapore.

SQ has a flawless product, that has never been questioned. However, more and more, people are selecting an airline not by on board experience, but by price. It started with deregulation in the United States and has spread world-wide. It appears to have hit Singapore.
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migair54
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 5:26 pm

Another problem with SQ is that now point to point connectivity in South East asia is much bigger, no need to pass via KUL or SIN to transit from A to B, and that´s thanks to low cost like Air Asia or Tiger Airways.

Business people always like to fly business but connectivity also helps a lot, we have seen this example in many more places where low cost airlines go after good business routes and start serving hubs and not only regional airports, but also regional to regional.

Singapore Airlines is in a zone where air travelling is booming and even in the medium haul they are going to suffer a lot, however they were safe in the long haul, but now the Middle East carriers are pushing really really hard, and I think they made a good move with Scoot, so they cover that market before someone else come and do for them.
 
EWRandMDW
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 5:37 pm

Whatever SQ does, one thing I hope is they don't abandon EWR. I know they fly to JFK, but many people located west of Manhattan detest having to schlep to JFK and there are surely business travellers in Manhattan who prefer EWR over JFK. I know this is heresy to many, but it is surely true!
 
MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 5:57 pm

Quoting longhauler (Reply 1):
SQ has a flawless product, that has never been questioned. However, more and more, people are selecting an airline not by on board experience, but by price.

   It's just the lifecycle of a network carrier really. Make no mistake, the same future awaits the GCC carriers as well.
E pur si muove -Galileo
 
blrsea
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 6:09 pm

SQ does not offer the best price for its flights on its website. Rather, the travel agents offer prices which are almost $200-300 below what SQ advertises on its website for US-India flights. I wonder why. Many airlines now offer the best prices on their websites.
 
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longhauler
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 7:02 pm

Quoting MaverickM11 (Reply 4):
It's just the lifecycle of a network carrier really. Make no mistake, the same future awaits the GCC carriers as well.

The big difference that that while the GCC carriers do offer a good product, often they are the cheapest as well. That is how they gained the advance in market share they have.

So when someone is looking at flights, they have to consciously think when looking at SQ, if they are worth the extra charged. Most on this site would say yes, however most travelers would not.
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yellowtail
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 8:01 pm

Quoting MaverickM11 (Reply 4):
It's just the lifecycle of a network carrier really. Make no mistake, the same future awaits the GCC carriers as well.

Agree 100%. At some point...a state of equilibrium will be reached. I have not doubt that SQ will survive. In whatever business you are in, One must always be at the top or at the bottom of the market to survive long term, the middle market may work short term but never long term. SQ is at the top...and IMHO the GCCs are in the middle, along with folks like QF...the bottom belongs to carriers liek AirAsia.
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LAXintl
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 8:04 pm

How about operating Silk Air under a unified Singapore Airlines branding?

I've always had concerns with Silk operating at an arms length to SQ.

Not only does one not always get to see joint itineraries and pricing in GDS for potential MI-SQ segments, but even the manner its treated for frequent flyer benefits is often different then SQ mainline which can dissuade people to utilize them.

It seems to me that with a diverse network that Silk has it would benefit to operate under a single brand with SQ.
Also I am sure there are some regional SQ flight could use narrowbody equipment also, either based on time of day, or to add further frequencies to destinations.



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MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Wed Jan 09, 2013 8:08 pm

Quoting longhauler (Reply 6):
The big difference that that while the GCC carriers do offer a good product, often they are the cheapest as well. That is how they gained the advance in market share they have.

I think that will accelerate their lifecycle, since they're not starting from a revenue premium, and will have to depend on a cost advantage more than anything.
E pur si muove -Galileo
 
Milesdependent
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 5:58 am

I do like the idea of combining Silk Air and Singapore Airlines. I think a big impediment to this would be the quality of the Silk Air product. While MI are a great airline, they do not have the same soft product or hard product as SQ. MI's business class is pretty ordinary, no PTVs in economy etc. I think people might be a bit cranky if they had gotten off a nice SQ flight to be transferred to an SQ 319. If it is marketed as a different airline this is less of an issue. How often do you hear people complaining about EK's 330s? And even teh business class seats on the old SQ 772s.

Re the comment around GDS, I thought SQ codeshared on almost every one of MI's flights?

As for SQ's strategy, I like what they are doing with Scoot and Tiger. I don't really see another way forward, except better partner integration with some other Star airlines. SQ seem to play on their own more so than most alliance partners.

SQ is a truly wonderful airline. Having flown 70-80 sectors with them across all classes (well, not F long haul unfortunately), I've never really had a bad experience. I will always pay a premium to fly SQ.
 
infinit
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 7:22 am

I think SQ no longer is the pacesetter they once were. Back in the early 70s when the bi-national Malaysia-Singapore Airlines split into the present day SQ and MH I read that SQ was the first carrier to offer full meals in Y and they made a name for themselves with a very consistent standard of service. Also at that time, I think their business model- having no domestic routes and competing on quality (since they cant compete on price) was fairly new but they showed how it could work. I cannot substantiate this but I believe that a lot of EK's model was based on the success of SQ.

But I don't find that brand awareness strong with people in their early to mid 20s here in Singapore or in Europe.

Today's consumers are more price-sensitive and less loyal. SQ can never offer the insanely low trans-atlantic fares QR and EK offer so I think the only way is to reposition them as the creme de la creme.

Their spend on catering has been declining. SQ too has been cost-c utting. What if they offered far better meals in Y and J with the strength of their ground services in SIN? Perhaps doubling their spend on catering. And launch a bold campaign to communicate this. Beyond the Singapore Girls ads, if they got word out that for flights longer than 3 hours out of SIN, you get a two course meal on Y in SQthat looks almost like J on other airlines, I've sure that can be a big draw.

Something more extrinsic and salient like this could strengthen the brand. But of course they should never get rid of the charming Singapore Girls ads too.

And my friends in SQ always tell me how they have too many PPS pax (their high-end loyalty program that requires a yearly S25k spend in J/Y on SQ metal for qualification). I found this strange. I have never heard of a company complaining about having too many loyal customers. I think they should beef up the value of this program. Probably more tie ups with restaurants, magazines and other services for exclusive discounts and promotions.. something that'll make you want to keep your PPS card with you where ever you go and get pax to want to qualify for PPS whether its on their own accord or persuading their corporate agents to use SQ.

So basically I think SQ still has a strong brand value and that's something they need to capitalise on and re-establish, boldly, to stay competitive. I've observed that in many countries in Asia where you don't have as big a middle class and instead find larger high-income and low-income groups, SQ is a strong status symbol. In India, China and Indonesian particularly. I've met so many wealthy Indonesians who tell me they would only fly SQ- no matter what.

[Edited 2013-01-09 23:29:21]
 
ozglobal
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 7:33 am

SQ became a dominant player on the Kangaroo route (Oz-Europe), have the advantage over Oz and European carriers of having a hub centrally located. Now the shoe is on the other foot, with M.E. carriers playing SQ's own game and often better. EK, EY and QR are eating into what SQ took from QF and BA. Only way forward is to make 'the cake' bigger.
When all's said and done, there'll be more said than done.
 
KFlyer
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 1:58 pm

Good question... I think it is a bit unclear right now, even to them... On a financial level, Scoot does not seem to be meeting the expectations and it comes as no surprise too. Scoot's model appears somewhat flawed - and SQ has willingly let it overlap own network without much differentiation. While the intention may have been to compete against the LCCs on SIN-BKK, I won't be surprised if Scoot has stolen some pax share from its parent.
The only real answer for SQ's situation is to grow Tiger in Southeast Asia, build up Silk and use its cost base to operate 3-8hr routes (OS - Tyrolean type agreement) and save the long-haul.
AirAsia X in its previous form would not have had a major on SQ as it was largely following a point to point model with little hub activity. However the launch of Scoot prompted D7 to intensify its activity and it will now be quite hard for Scoot to replicate the same without eating into SQ's revenues .
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airbazar
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 2:11 pm

Quoting MaverickM11 (Reply 4):
It's just the lifecycle of a network carrier really.

   I agree entirely. SQ has been here many times before. This is not the first time they are laying off staff to cope with weaker demand.

Quoting infinit (Reply 11):
I think SQ no longer is the pacesetter they once were.

I disagree.

Quoting infinit (Reply 11):
I cannot substantiate this but I believe that a lot of EK's model was based on the success of SQ.

How can you say that SQ is no longer the pace setter and on the same paragraph say that EK has based a lot of its business model on SQ? EK wants to be SQ but they're not there yet. Maybe they will achieve that. Maybe they won't. Only time will tell.
At the end of the day SQ is, and always will be a niche carrier while EK is an airline for the masses. I think SQ understands that they will never be able to achieve the global reach of EK, due to their inherent geographic location. Likewise for 99% of the airlines of this world. What SQ can be is the best airline on the routes and markets that they compete in.
 
MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 2:27 pm

Quoting infinit (Reply 11):
I cannot substantiate this but I believe that a lot of EK's model was based on the success of SQ.

The DXB model is based on SIN, but the SQ/EK models are just a simple hub and spoke model based on none other than US carriers that originated the model
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trent1000
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 2:30 pm

Quoting longhauler (Reply 1):
SQ has a flawless product, that has never been questioned.

NO airline has a "flawless product that has never been questioned" - way too strong a claim! No airline is perfect...
For example, the SQ medium haul business class seats are still not fully 'flat', which would be a noticeable and appreciated improvement on overnight flights to/from Australia.
 
787kq
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 2:51 pm

Quoting longhauler (Reply 6):
The big difference that that while the GCC carriers do offer a good product, often they are the cheapest as well. That is how they gained the advance in market share they have.

Agree with the above.

However, who says SQ can't be cost competitive? Is it more expensive to offer good service? Many of the legacy carriers died due to agreements that made them to pay high wages, have sometimes ludicrous work rules, etc., similar to what happened in Detroit. I agree that price is the main factor and if better service provided at that price, travellers will chose that option.
 
ManekS
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 2:52 pm

Whilst SQ may have lost its position as a leader on the Kangaroo route, there are still abundant opportunities for them to grow by connecting markets closer to home.

Singapore sits smack in the middle of one of the worlds most rapidly developing regions - ASEAN. Trade between these nations will undoubtedly burgeon in the years to come, and open skies, which comes into effect from 2015, will help for sure. SQ has a unique opportunity to become the carrier of choice for global investors who will flock to countries like Malaysia, Indonesia, Myanmar and Vietnam, and of course, India and China. SIN is poised to become a perfect gateway to welcome them.

I think the management recognize this, and have embarked on capitalizing on the opportunity by making sure Silk Air is prepared. Their large order of narrowbodys will penetrate several new, smaller markets, feeding passengers to SIA's European, North American and Oceania bound 777's and A380's. SQ will of course upgauge equipment and fly their own metal to larger regional centers when the time comes, RGN for example.

At the same time, they have also positioned themselves to benefit from ASEAN's growing middle class. Tiger will carry holidaymakers to destinations around Asia, and Scoot to places further afield.

Of course, at its core, SIA will still have a very loyal client base who will continue to fly them from Europe to Australia even at a premium price. The Middle Eastern airlines will continue to gobble the high volume, low yielding segment which SQ doesn't particularly care for anyway.
 
LAXintl
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 6:32 pm

Also one thing I have noted over the years observing SQ both publicly and behind the scenes is that the company mainline is seemingly becoming ever more conservative and shying away from risk. While things are often over studied into minute detail, the enterprise is often slow to act. Somewhat akin to a lumbering Japanese company.

Seems like all the risk and outside the box creative thinking is done by the Scoot and Tiger teams while mainline keeps plugging along with the same old.

While SQ is certainly one the great brands in the industry, it no longer even holds the title of being the only local game in town with Singapore becoming a growing battle ground.


I recall reading a story last year that SQ focus would be more on the Asia Pacific region and growing its intra-region flying including links to Australia. I would believe if this is the long term path then Silk and its narrow body fleet would be the key player in making this happen. If so might be even more imperative to unify the brands.

Quoting MilesDependent (Reply 10):
Re the comment around GDS, I thought SQ codeshared on almost every one of MI's flights?

No not at all. Even go look on SQ own website and they often shows flights using the MI code.

Besides flights not showing up nicely in GDS as single carrier segment, it seems MI-SQ have not been very good about pricing jointly either. With MI serving so many cities across Asia, you would think they would have filed and made available unified pricing to SQ markets - or atleast the larger ones.

Imo its sad to see when my colleague the other day was looking for flights, had his Virgin Australia BNE-SYD segment show as codeshare with SQ code, but his Silk segment remained MI coded.
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DolphinAir747
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 7:29 pm

With TZ and MI on one end and their superb premium products priced accordingly on the other end, SQ seems to be grabbing both ends of the market. With the developmemt of so mamy nations, SQ seems to be targeting and capturing both the growing price-sensitive but periatetic middle classes and the new rich. I applaud them.

I'm surprised that SQ's strange relationship with *A hasn't been discussed more here. Is SQ's general non-cooperation a sound strategy or a dangerous arrogance? CX and KE are in a respective, though not as extreme, position in their respective alliances.
 
LAXintl
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 9:15 pm

Quoting DolphinAir747 (Reply 20):
With TZ and MI on one end and their superb premium products priced accordingly on the other end,

You might be confused - MI is Silk Air, a rather regular conventional airline.

SQ even calls MI a "premium" airline
SilkAir, a wholly owned subsidiary of Singapore Airlines, is one of Asia’s leading regional carriers.
Positioned as a premium short- to medium-haul carrier, it operates across Asia, serving both leisure and business travellers alike.


LCC carriers in the family are Scoot(TZ) and Tiger Airways(TR).
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Viscount724
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 10, 2013 9:24 pm

Quoting LAXintl (Reply 19):
With MI serving so many cities across Asia, you would think they would have filed and made available unified pricing to SQ markets - or atleast the larger ones.

Perhaps they have enough higher-yield O&D demand and don't need the longhaul connections which would be competing with many other options with fares probably even undercutting fares to/from SIN. What are MI's average load factors?
 
Azure
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 1:16 am

Quoting Viscount724 (Reply 22):
What are MI's average load factors?

76% (FY2012)

Here is a very interesting, detailed analysis of the SIA group. It covers all the topics discussed in this thread
SilkAir poised for rapid growth after quietly emerging as SIA's gem : http://centreforaviation.com/analysi...quietly-emerging-as-sias-gem-80190

Quoting LAXintl (Reply 21):
SQ even calls MI a "premium" airline

I think it implies that it is not just low cost ! Based on my personal and anecdotical experience (flew with MI twice only), their product and service were standard, ie on par with the European legacies on medium-haul for instance.
 
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DolphinAir747
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 1:51 am

Quoting LAXintl (Reply 21):
You might be confused - MI is Silk Air, a rather regular conventional airline.

I flew SIN-REP-SIN on MI two years ago, and everything was so superior to legacy carriers in the U.S.

However, MI certainly serves lower-yielding destinations than SQ itself—tourist destinations such as USM and REP, as well as secondary cities in India, China, Indonesia, etc. which don't have the same business demand as BOM, PVG, CGK, etc. Just like B6, MI is able to perform well while going for generally low-yielding traffic due to the lower costs of being a newer airline. Again, though, SQ Group (if that name even exists, but assume that it does for SQ, MI, TR, and TZ) really covers the whole gamut in terms of the yields it pursues. Venturing into low-yielding markets does not equate to bleeding money if one uses an SQ Group-like strategy of diversification.

SIN-SYD, for example, really covers the whole rainbow, from ridiculously priced SYD-SIN-LHR tickets in SQ Suites to bottom-of-the-barrel prices for less wealthy tourists on TZ.
 
airbear
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 2:16 am

Quoting OzGlobal (Reply 12):
SQ became a dominant player on the Kangaroo route (Oz-Europe), have the advantage over Oz and European carriers of having a hub centrally located. Now the shoe is on the other foot, with M.E. carriers playing SQ's own game and often better. EK, EY and QR are eating into what SQ took from QF and BA. Only way forward is to make 'the cake' bigger.

Hi all, IMO following the virtual surrender (or TOTAL surrender if you consider ADL, PER & BNE) of QF to EK for services to Europe from April, SQ's market share will grow nicely on the Roo Route , particularly in the premium cabins and higher-yielding, more business-friendly flexible Y fares.

Going by what I have been reading in the media and on blogs, for many people, Singapore (or HK, for that matter ... and CX will be the other main beneficiary in this, especially as they are in the same alliance as QF) is still a more appealing prospect for a transit or 1-night stopover, than DXB.

I am sure both SQ and CX are still pinching themselves to check if they are really dreaming or not!

Cheers.
 
timpdx
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 3:10 am

I just flew SIN-YGN on SQ metal by choice. Fares were the same as MI but I would take a full service wide body 772 every day of the week. SQ did not disappoint, but hard product to hard product, the don't really stand ahead of recent experiences in OZ and MH.

I also know a frequent SIN to USA flyer in the tech biz that is disappointed the direct SIN LAX/EWR flights are going away. He says the flights are always full when he goes. Not that 2 ulh flights are the be all of an airline.
 
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qfvhoqa
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 3:29 am

Quoting OzGlobal (Reply 12):

SQ became a dominant player on the Kangaroo route (Oz-Europe), have the advantage over Oz and European carriers of having a hub centrally located. Now the shoe is on the other foot, with M.E. carriers playing SQ's own game and often better. EK, EY and QR are eating into what SQ took from QF and BA. Only way forward is to make 'the cake' bigger.

I agree, SQ grew on the back of AU-EU transit pax. But EK/EY/QR have an advantage in that they're closer to EU than SQ, allowing flights to secondary EU cities that SQ/CX could never dream of serving, like VCE or MLA.
SQ's future might well be in intra-Asia flights, and AU-Asia flights, rather than AU-EU or Asia-EU flights.
 
brightcedars
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 9:18 am

Singapore Airlines has to adapt to its new environment in that the development initiative has been successful that Singapore is now a 1st World country and economy. The local market has matured and more people can fly but are more cost conscious about it, and the global market has evolved dramatically with more direct routes and much more hub competition, primarly in the Gulf region. There will always be room for Singapore Airlines's premium product but I think they will evolve towards a BA model over the longer term, no more hub and spoke but point to point in and out of Singapore. Now I don't mean you won't be able to fly SQ LHR to SYD, just that this will not be the core revenue stream. They have good management and I'm sure they'll adapt and keep gracing the skies with refinement and leadership.
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Aither
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 12:47 pm

Do you know which car brands performs among the best in Europe during this time of crisis ?
Audi & Mercedes and the low cost brand Dacia.

Yet some Audi are no better than some Toyota or Renault.

There are still, and more and more people ready to pay more for a brand they trust. When it's vital to go from point A to point B on time and with a top comfort, without the headache of connecting you would rather trust SQ than EK, no matter what the statistics say.

But if you give room for the "Toyota's" to become too big in your market, then one day you see a Lexus car dealer entering your market.

As it was noted in this discussion, the market coverage of SIA is quite unique but really makes sense. The strength of EK and alike was largely built on the weaknesses of foreign carriers not willing to penetrate some markets as they were considered too "low yield".



[Edited 2013-01-11 04:50:11]
Never trust the obvious
 
factsonly
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 11, 2013 1:04 pm

SQ's success is largely based on 6th freedom traffic, for which an airline requires an understanding airport focussed on providing transfer excellence. Beginning in the 1950's KLM/AMS were the first to develop themselves into 6th freedom/transfer specialists. And since, several airline/airport combinations have successfully copied the KL/AMS formulae. SQ / Changi and now EK/DXB are the best examples.

And.. as you will read below, others are still trying to emanate the classic international 6th freedom airline model.

http://centreforaviation.com/analysi...nging---sixth-freedom-market-93804
 
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Revelation
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 12, 2013 4:04 pm

Quoting LAXintl (Thread starter):
Unlike much of its regional peers, SQ proper is seemingly not growing

We read in another thread that EK is not pleased with first class yields, and is discussing the well-known plan to have two-class A380s in its fleet, as it heads towards having 90 of the A380-800.

We also read that SQ has firmed its additional 5 A380s for a total of 24.

To me this seems like a lot of seats chasing a finite number of pax and yields, but it seems their recent top-off order shows SQ feels it is the right thing to do.
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DolphinAir747
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 12, 2013 4:55 pm

I haven't travelled on SQ, even less in F/R, but has anyone who has expound on the load afctors in those classes? It seems like SQ would do better by keeping but downsizing its F/R cabins.
 
LAXintl
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RE: Future Of Singapore Airlines And Its Strategy

Mon Jan 14, 2013 10:46 pm

No clue on SQ loads per class, however per its annual report it ran an average 77.4% load factor on SQ mainline.

In my experience, SQ has always been a more premium heavy operation and for the most part this has worked.

But as explained in its last annual report, the airline saw weakness in the market due to global economic uncertainty weak consumer confidence, with both passenger and cargo yields coming under pressure. They also says that frequent promotional activities necessitated by intense competition amongst airlines and efforts to stimulate travel demand further hurt yields which were down 5.9% year over year. The report shows that SQ is seeing pressure in all regions, including intra-Asia.

Silk Air on the other hand saw its yields grow 4% year over year on about 12% more revenue.

Make of it what you will.
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LAXintl
Topic Author
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 4:45 pm

Bunch of news out on Scoot.

o LF for first 7-months of service was 78%
o Quietly launched interline with Silk Air on Jan 15th covering 19 destinations.
o Will expand their Tiger partnership to allow interlining with Tiger's Indonesia and Philippines divisions. Partnerships will cover 43 destinations in total.
o Expect to add "several" airline partners outside the SIA group. Over 60 foreign carriers serve SIN with some looking to have a partner - example could feed connections to Scoot Australia service.
o 1 added 402 seat 777 planned in May 2013. None in 2014. Wait for 787 in 2015 of which they plan 20.
o 4 and 5th China destination likely in 2013. Bilateral issues holding up South Korea and India.
o 787s will hold 350-360 seats in 2-class config.
o Will look to open new routes like Saporro and secondary cities in India with 787 fleet.
o 787s will deliver 15% reduction in per seat operating cost
o Scoot is unlikely to be consistently profitable until 787 in place.
o SIA believes there will be sufficient differentiation between it and Scoot and will not dilute this position or cannibalise its full-service economy class business.
o Changi airport looking to promote LCC transfer traffic which would help grow overall activity at airport. For example 14% of Jetstar pax connect at SIN.


Story:
http://centreforaviation.com/analysi...its-are-still-two-years-away-94374

=
From the desert to the sea, to all of Southern California
 
United Airline
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 4:56 pm

Quoting infinit (Reply 11):
But I don't find that brand awareness strong with people in their early to mid 20s here in Singapore or in Europe.

How come? I thought young people love to enjoy
 
MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 5:00 pm

Quoting LAXintl (Reply 34):
o Scoot is unlikely to be consistently profitable until 787 in place

Even then I don't think it's going to work without a major overhaul. The execution has been terrible--a 400 seat 777 flying things Air Asia X wouldn't do with schlocky branding. I just can't fathom an "LCC" running a domestic Chinese tag on a 777--there's nothing low cost about that.

Quoting LAXintl (Reply 34):
o SIA believes there will be sufficient differentiation between it and Scoot and will not dilute this position or cannibalise its full-service economy class business.

They are dreaming.
E pur si muove -Galileo
 
jfk777
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 7:15 pm

Quoting migair54 (Reply 2):
Another problem with SQ is that now point to point connectivity in South East asia is much bigger, no need to pass via KUL or SIN to transit from A to B, and that´s thanks to low cost like Air Asia or Tiger Airways.

Business people always like to fly business but connectivity also helps a lot, we have seen this example in many more places where low cost airlines go after good business routes and start serving hubs and not only regional airports, but also regional to regional.

Singapore Airlines is in a zone where air travelling is booming and even in the medium haul they are going to suffer a lot, however they were safe in the long haul, but now the Middle East carriers are pushing really really hard, and I think they made a good move with Scoot, so they cover that market before someone else come and do for them.

AS LCC airlines rise and other airlines mature, Singapore will decline as a hub and rely more on O and D demand.
This is just a sign of Singapore Economic might and should not be looked at as a negative, so what if Qantas hubs in Dubai. Singapore is also right on top of hundreds of millions Indonesians who's own airlines are geographically challenged. Changi and SQ will continue to be a powerful hub and pioneering airline, the next 797 or A360 will probably have an early customer in SQ or one of its subsidiary airlines. Maybe its time Singapore fly the South Pacific from Auckland or Sydney to South America's west coast, Santiago Chile awaits.

Quoting factsonly (Reply 30):
SQ's success is largely based on 6th freedom traffic, for which an airline requires an understanding airport focussed on providing transfer excellence. Beginning in the 1950's KLM/AMS were the first to develop themselves into 6th freedom/transfer specialists. And since, several airline/airport combinations have successfully copied the KL/AMS formulae. SQ / Changi and now EK/DXB are the best examples.

Singapore Air still flies from SFO to Hong Kong and Los Angeles to Tokyo, so many people will fly them even if Singapore is not their destination.
 
airDFW
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 9:49 pm

Would making nice with other alliance partners would help SQ more?
 
jfk777
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 10:51 pm

Its Singapore Airlines who doesn't "need" help from Star alliance airline which are not up to its "standards".
 
koruman
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RE: Future Of Singapore Airlines And Its Strategy

Thu Jan 17, 2013 11:25 pm

Quoting longhauler (Reply 1):
SQ has a flawless product, that has never been questioned

I question it.

I flew them in Economy from BNE-SIN-JNB as part of a Star Round The World ticket with my other long-haul flights on SAA, Lufthansa and Air New Zealand.

And there was nothing superior about Singapore Airlines' product, apart possibly from the cabin crew being more obliging than LH's.

And the Star Gold recognition was worse than on any of the other carriers, where as usual I was packed off to a cheap and nasty non-SQ lounge at Singapore. I think that the quality has deteriorated massively.

Quoting LAXintl (Thread starter):
SQ proper is seemingly not growing, and it looks like increasing volume of group flying will be done by its affiliate carriers in the future.

And this is a related problem.

I live near Brisbane, Australia, and in May I have a business meeting in Singapore which I want to combine with a leisure trip to Phuket. The leisure extension means that I have to buy my own fare, part of which I can claim as a tax deduction.

My Star Gold status is important to me, but I'm aware that:

1) My last SQ flights were mediocre.
2) My Star Gold recognition at SIN is always derisory.
3) My frequent flyer program has devalued miles and status earning on all partner carriers within the Star Alliance to levels where loyalty is no longer worthwhile.
4) I earn no miles or status for Silk Air operated flights.

My first port-of-call was Singapore Airlines.

They quoted me $1069 in Economy Class to Phuket with a stopover in Singapore. This $1069 would secure me Economy seating all the way, lounge use at Brisbane and the awful lounge at Singapore on the return flight to Brisbane, but no lounge use, miles or status credits for my Silk Air flights Singapore-Phuket-Singapore.

They offered me the same flights in Business Class for $4479.

In the end, I put together my own itinerary using their own subsidiaries - Scoot and Silk Air.

I will fly Business Class on Scoot OOL-SIN return for $709. I will have no lounge access. The product won't be anywhere near as good as Singapore Airlines Business Class, but it will be a lot better than the Singapore Airlines Economy product which would have cost me slightly more money.

I will also fly Economy Class on Silk Air between Singapore and Phuket for $270 return, so my total ticket comes to less than $1000 but gives me Business Class for the 7 hour flight and Economy Class for the 1.75 hour flight.

Having two separate tickets isn't really a problem as I have several days in Singapore to work at the start, and I'll overnight there at the end.

In other words, the combination of poor treatment of Star Alliance Golds at Changi and the total lack of recognition of them on Silk Air has seen Singapore Airlines' own subsidiaries cannibalise a sale which would have gone to the parent airline.

And I'm in the highest elite category of my airline - I don't do LCCs. Except when the legacy carrier's product and price is so inferior that it makes sense for me to do so. Qantas make a similar error - I'm in the habit of often flying Business Class SYD-HNL-SYD on their LCC subsidiary Jetstar because the fare is 75% lower than Qantas itself for a comparable product which earns identical points and status in Qantas' own frequent flyer program.

Funnily enough, my "other" Singapore-Phuket option was Tiger, so the sale would have been going to the same parent anyway.

I suspect that the deeply conservative management of the Singapore Airlines group considers that so long as the consumer is only going to Silk Air or Scoot or Tiger they haven't lost any business. But of course they have really - they have funneled a consumer who usually is a high-yielder into buying an LCC ticket.

[Edited 2013-01-17 15:39:18]
 
infinit
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 25, 2013 4:59 am

Sorry this is coming late in the discussion. Just read it

Quoting MaverickM11 (Reply 36):
They are dreaming.

Yes they are. Right now I can fly from Singapore to Sydney on SQ in Y at S$1000 (US$850) or on Scoot at S$450. I'd go with the latter.

Scoot will hurt SQ's Economy loads but SQ gets most of its revenue from Business and First Class and to date they have had fare sales in either cabin class except during the 2008 financial crisis where they had selected J fare sales.

I think its fine if SQ's economy loads drop with Scoot and it probably will. I don't expect SQ would grow much unless something changes but even without growth, SQ can be highly profittable from being small and "top-heavy"-focused on being very premium.

But with that they need to be innovative (beyond cost cutting!)- they need to offer more for Asia's exponentially-growing number of millionaires to spend their money on them over the likes of EK, EY and even rising stars like GA.

And if they go with this strategy, they will need to be better aligned with StarA.
 
MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Fri Jan 25, 2013 10:03 am

Quoting jfk777 (Reply 39):

Its Singapore Airlines who doesn't "need" help from Star alliance airline which are not up to its "standards".


I believe they think that but they are finding that they need Star more than the reverse.

Quoting koruman (Reply 40):
Funnily enough, my "other" Singapore-Phuket option was Tiger, so the sale would have been going to the same parent anyway.

I suspect that the deeply conservative management of the Singapore Airlines group considers that so long as the consumer is only going to Silk Air or Scoot or Tiger they haven't lost any business. But of course they have really - they have funneled a consumer who usually is a high-yielder into buying an LCC ticket.

This highlights what an unfocused mess the SQ family of carriers has become, and how revenue negative it all likely is.
E pur si muove -Galileo
 
EBGflyer
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 7:03 pm

I think SQ is an awesome airline, but I also see some of the same issues as several other posters here. One of them being the lack of Star Gold recognition.

I usually choose SQ over other airlines as they have good service, but unfortunately they don't always fly to places I go. I think it's great there are possibilities to fly SQ not necessarily flying in or out of Singapore. As US is so far away from SIN everyone needs to make a one-stop anyway (bearing in mind SQ also offers a soon to end non-stop). SQ already offer several one-stops into USA. Is there basis for more?

SQ one-stops into USA:

SIN-HKG-SFO
SIN-ICN-SFO
SIN-NRT-LAX
SIN-FRA-JFK

Is there basis for more?
Several of the big Asian cities have multiple daily flights to Singapore. Why not make one of those flights a one-stop flight into USA ie:

SIN-PEK-NYC
SIN-PVG-NYC
SIN-PVG-SFO
SIN-TPE-SFO

MNL is probably not high-yield enough, but routewise not too far off.

Or perhaps having more flights to East coast USA via Europe.
Future flights: CPH-BOS; CPH-SVG; CPH-PVG-HKG-MNL-DVO; CPH-CDG; CPH-NRT; CPH-MIA; CPH-PVG
 
avek00
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 7:21 pm

Quoting jfk777 (Reply 39):
Its Singapore Airlines who doesn't "need" help from Star alliance airline which are not up to its "standards".

Even SQ doesn't believe that nonsense, as they codeshare with none other than....WAIT FOR IT...US Airways!
Live life to the fullest.
 
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DolphinAir747
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 9:20 pm

Quoting avek00 (Reply 44):
Even SQ doesn't believe that nonsense, as they codeshare with none other than....WAIT FOR IT...US Airways!

It's not that SQ doesn't codeshare with anyone, but overall they're probably the most uncooperative airline oif any in its alliance—worse than CX or KE. The strategy is basically that they can reap some of the benefits of being in an alliance without suffering the costs, and since their hard product and service are considered by many to be the best in the world (some people really go out of their way to fly SQ), *A wants to keep SQ in the alliance for prestige even if SQ acts like a jerk in the alliance. While I find it extremely annoying that I can't use my UA miles to get award seats on any of their aircraft to the U.S., if SQ makes money by selling those seats or giving them just to their own frequent fliers, then they will continue to act that way.
 
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yellowtail
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 10:03 pm

Quoting EBGflyer (Reply 43):
SIN-HKG-SFO
SIN-ICN-SFO
SIN-NRT-LAX
SIN-FRA-JFK

Is there basis for more?

There already is

SIN-DME-IAH
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
jfk777
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 11:04 pm

Quoting EBGflyer (Reply 43):
SIN-PEK-NYC
SIN-PVG-NYC
SIN-PVG-SFO
SIN-TPE-SFO

Taipei to the USA has lots of flights already. The Chinnese Government probably wouldn't let Singapore Air fly via Peking or Shanghai to the USA.
 
MaverickM11
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RE: Future Of Singapore Airlines And Its Strategy

Sat Jan 26, 2013 11:22 pm

Quoting jfk777 (Reply 47):
Taipei to the USA has lots of flights already

Plus SQ couldn't make LAXTPE work. SQ in general is down a bit in capacity to the US from its peak, so I think they're probably at best satisfied with their current US network.
E pur si muove -Galileo
 
LAXintl
Topic Author
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RE: Future Of Singapore Airlines And Its Strategy

Sun Jan 27, 2013 12:09 am

Quoting MaverickM11 (Reply 48):
Plus SQ couldn't make LAXTPE work.

Oh I think it worked fine - for some 26-years.

But with the nonstop to LAX which they at the same time reconfigured the cabin on, SQ ended up with 3 daily flights which was too much especially when global economies took a dump and fuel ran up to $140 summer of 2008, so something got cut.

From the hints the LA sales office have made, I would bet a second flight is added back to the LAX schedule, and would not be shocked if its the TPE stop again.
From the desert to the sea, to all of Southern California