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lutfi
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SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:16 am

Singapore Airlines reports the following traffic highlights in Feb-2015:
•Passenger numbers: 1.4 million, -1% year-on-year;
•Passenger load factor: 75.2%, -1.6 ppts;
◦East Asia: 77.7%, -0.6 ppt;
◦Americas: 69.9%, -7.4 ppts;
◦Europe: 69.3%, -5.4 ppts;
◦South West Pacific: 84.9%, +5.2 ppts;
◦West Asia and Africa: 71.1%, stable;

•Capacity (ASKs): -1.3%

Is this the ME effect?
 
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BreninTW
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:20 am

I'd say it's most likely the Chinese New Year effect ... Cathay commented in its monthly traffic report that CNY resulted in a dip in its premium passenger numbers (although CX did report an overall increase in passenger numbers).
 
anstar
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:27 am

The biggest drops are in Europe and the America's. Presumably europe is the biggest market effect by the ME carriers, Americas probably a little.
 
lutfi
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:45 am

CNY was in February this year, so you would expect more traffic, not less!

(Cathay traffic was up 12.4% in FEB)
 
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BreninTW
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:51 am

Quoting lutfi (Reply 3):
CNY was in February this year, so you would expect more traffic, not less!

Remember CX has the very large population of the PRC on its doorstep -- which SQ doesn't tap into with the same success. CX reported a drop in premium traffic which reflects the drop in business travel over CNY. SQ has a relatively smaller "home" market for CNY than CX does. I imagine that SQ felt the drop in business traffic to the PRC more strongly than CX would have because CX can pick up the leisure traffic to Europe and the US.
 
byronicle6
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:54 am

Interesting to note the variance in load factor between regions.... from 69% on Europe routes to 85% on South West Pacific flights
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MaverickM11
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:59 am

Quoting lutfi (Thread starter):
Is this the ME effect?

Yes

Quoting lutfi (Reply 3):
CNY was in February this year, so you would expect more traffic, not less!
Quoting BreninTW (Reply 1):

I'd say it's most likely the Chinese New Year effect

CNY is probably shifting passengers around, but the trend of passenger growth stalling or falling at SQ stretches back to at least October 2014
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ZK-NBT
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 8:32 am

Quoting byronicle6 (Reply 5):

Interesting to note the variance in load factor between regions.... from 69% on Europe routes to 85% on South West Pacific flights

Peak season to OZ/NZ, winter in Europe, but I was surprised how low Europe and the US were.
 
sq452
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 10:18 am

Quoting anstar (Reply 2):

The biggest drops are in Europe and the America's. Presumably europe is the biggest market effect by the ME carriers, Americas probably a little.

Europe is definitely the largest affected but keep in mind that SQ really only competes with the ME3 on the eastern half of the US and only directly on two stations (JFK and IAH). Indirectly, you have cities like PHL and BOS that only are one-stop from SIN on an ME3 carrier instead of two stops on SQ. In that regard, the ME3 I would reckon pull some traffic away.

SFO and LAX -the other two SQ stations in the US- don't really have too many people routing from Asia through the Middle East although I do know someone that flies from Southeast Asia to LAX purely for Shake Shack in DXB!

Keep an eye on March's figures.
SIN > CVG > BOS
 
jumpjet
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 10:31 am

Speaking as an aviation enthusiast rather than a professional, surely the EK effect must be hurting SQ? Whenever I speak to friends going to Australia or New Zealand these days, they're all going with EK via Dubai rather than via Singapore or Hong Kong. When I last went out to Australia 4 years ago there didn't seem to be the choice of routes that there are now, we went via Hong Kong and came back through Singapore.

We have friends coming from Australia next month and they're flying Brisbane to Perth with QF, then Perth - Dubai and Dubai - Heathrow with EK. They've got an amazing deal too.

Dubai seems to be the natural choice nowadays, EK have so many connecting flights from all over Europe, that it must be taking so much business away from the traditional routes through Hong Kong and Singapore. Am I right? Just asking.....
 
MaverickM11
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 10:39 am

Quoting jumpjet (Reply 9):
Dubai seems to be the natural choice nowadays, EK have so many connecting flights from all over Europe, that it must be taking so much business away from the traditional routes through Hong Kong and Singapore. Am I right? Just asking.....

Yep. The student (EK) has become the master (SQ).
I don't take responsibility at all
 
Prost
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 1:42 pm

So if/when the EK effect starts putting SQ in to a position of having losses, will people still be happy with EK?
 
ytz
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 1:51 pm

Quoting Prost (Reply 11):
So if/when the EK effect starts putting SQ in to a position of having losses, will people still be happy with EK?

Why would anybody have any emotion towards a business?

SQ is what it is because of geography. EK is going down that road. SQ can readjust and focus on where they have a geographical advantage. Or try competing with ME3 and get clobbered. Can't fight geography.

And given enough time, even the ME3 will lose to geography. TK and the Indian carriers are even better positioned than they are.
 
hohd
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 2:11 pm

Quoting jumpjet (Reply 9):

Definitely affecting business especially EU-Australia traffic. My brother and his family are flying from MAN to AKL and return from SYD and they chose EK partly because it was cheaper and also due to convenience and frequency. They really wanted to fly SQ, but in the EK made much more sense and economical.
 
airbazar
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 3:35 pm

Quoting lutfi (Thread starter):
Is this the ME effect?

Yes but is this really newsworthy? SQ traffic to Europe and the Americas has been dropping for years.

Quoting BreninTW (Reply 1):
I'd say it's most likely the Chinese New Year effect

Uh? The biggest drop was to Europe and the Americas. What does that have to do with the Chinese New Year?
*Americas: 69.9%, -7.4 ppts;
*Europe: 69.3%, -5.4 ppts;
 
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LAX772LR
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:24 pm

Quoting YTZ (Reply 12):
And given enough time, even the ME3 will lose to geography. TK and the Indian carriers are even better positioned than they are.

Yes and no. There's a balance here between the forces of geography and basic competence. The latter is key.

TK has it. The Indian carriers, well, don't.

Or maybe some of them do, but we'd never know it, seeing as how they're artificially hobbled by their own government to the point of abject crippling.
I myself, suspect a more prosaic motive... ~Thranduil
 
bobdino
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 7:52 pm

Quoting MaverickM11 (Reply 6):
Quoting lutfi (Thread starter):
Is this the ME effect?

Yes

It's not that simple. Jetstar, Air Asia, and Air Asia X are going hard. The Chinese airlines are growing like crazy. For example, in 2010, China Eastern had less-than-daily service to Australia. Shortly they will have 53 flights/week. Source: http://centreforaviation.com/analysi...ntinuing-international-push-213091

The ME3 are definitely part of it, but other airlines have retrenched too (BA and VS and QF come to mind), creating space in the market for SQ to expand. So you can't just say "SQ are being brutalised by the ME3".
 
chrisp390
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 9:20 pm

Hopefully they will try expanding a bit once 350 deliveries start. They seem to have stagnated the past few years and not had much growth
 
Motorhussy
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RE: SQ Passenger Drop, ME Effect As Well?

Tue Mar 17, 2015 9:52 pm

Quoting ZK-NBT (Reply 7):
Quoting byronicle6 (Reply 5):

Interesting to note the variance in load factor between regions.... from 69% on Europe routes to 85% on South West Pacific flights

Peak season to OZ/NZ, winter in Europe, but I was surprised how low Europe and the US were.

But also, both Australia and New Zealand have massive longhaul competition from the ME3, particularly EK. So were EK loads up so high over this period too in SWPacific? And, if so, does this just underline how buoyant the economies are in this part of the world compared to a still stuttering US and Europe?

I do tend to agree with bobdino, and that a lot of the slowdown at SQ is due to increased local competition and that of the rise of the Chinese carriers.
come visit the south pacific
 
Prost
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 2:18 am

So the question I have is many world posters talk about how abysmal the US3 are, and they need to up their game to compete against the ME3. Here we have a situation of arguably the premier carrier of the world having difficulty competing against the ME3. So if you can't compete on product or service, what's left?
 
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Coal
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 4:54 am

This comes up every few months, but here are my thoughts on what are the key issues for SQ and what are potential strategies:

Issues
- ME3: Definitely. EK has taken a lot of the Europe Australia traffic away from not only SQ, but to a certain degree CX, TG, and MH. Emirates has such an incredible presence in Australia, from both a capacity and marketing point of view, that it would be easy to forget that SQ is the largest foreign carrier in Australia

- LCCs in East/Southeast Asia: These airlineshave also taken some of the market share from SQ, primarily the people who used to have tremendous loyalty towards SQ but who would typically fly in the back in the Y seats. 10 years ago you might still fly SQ to Hong Kong, Bangkok, Taiwan, etc., but these days these routes are very well covered by the likes of JQ/VF, TR, all the Air Asia incarnations, etc. Of course, one should note that at least SQ realized early on it would lose these passengers and acted to set up TR and TZ to at least capture some of those pax under a different business model

- Proximity to China: I think this is a double-edged sword. I think from North America or Europe, CX has taken this away from SQ (if it ever was a significant portion of SQ's pax). This is clearly evidenced by CX's expansion in Europe and the US

Potential strategies
- ASEAN: I still believe that continuous economic growth in ASEAN, particularly in Indonesia, will be a key driver of future growth for SQ. There will be many naysayers, but those are the same who never thought possible medium to long haul flights from secondary Chinese cities, and possibly also the same people who never thought DXB, AUH, or DOH would become what they are today (admittedly that's a different model, but you get the idea). SQ's brand is extremely strong in Indonesia, although the risk here is GA continuing to become a better, more reputable carrier. Still, I think being the leading airline moving people into and out of ASEAN will be key for SQ

- Proximity to China: SQ needs to continue to be the carrier of choice between Australia, ASEAN, Africa, and China. Despite the big (and some small, too) Chinese carriers expanding like crazy, in the pointy end of the plane, SQ has a huge advantage, and SQ nees to continue to be the carrier of choice between PER, ADL, MEL and to a lesser extent SYD and BNE, to China, and not only to PEK and PVG, but to all the other cities that SQ and MI fly to. The same goes for routes from secondary ASEAN cities (e.g. SUB) to first tier and second tier Chinese cities. The biggest risk here is CX. At the same time, I think SQ missed the boat on traffic between Africa and China. I am not even sure where this market will go. The time to establish a codeshare with ET was not 1 - 2 years ago, but 5 - 7 years ago. Adding a flight on their own metal to ADD was also 5 - 7 years ago. But I think there's an opportunity

Rgds
Coal
Nxt Flts: SQ SIN-KIX | HD UKB-CTS | NH CTS-NRT | SQ NRT-SIN | AK SIN-DPS-SIN
 
a320fan
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 5:10 am

The brand presence of EK in Australia is massive. Speak to the majority of people who are travelling to Europe and you will hear Dubai mentioned as their stop off point. This was happening long before QF went through Dubai too.
Ask the majority of the general population (so non aviation fans) who the best airline is and I bet you the most frequent answer would be Emirates.

However I presume that Australia would be classed in the "Southwest Pacific" group in the original post which is claiming a load factor of 85% and +5% growth. Interesting considering the often mentioned overcapacity in these markets. Are they counting Scoot?
A319, A320, A321, A330-200, A350-900, A380, 737-700, 737-800, 777-200ER, 777-300, 777-300ER, 787-8, Q300, Q400
 
Kashmon
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:09 am

TG and MH are dying...

the loss in Europe is definitely because of EK etc who are able to offer similar or better products

and the loss to NA is definitely because of CX - I mean they pretty much run a shuttle service to the New York region...
4 daily to LAX
2-3 daily to SFO
Chicago
and now Boston

SIN locals know the flexibility CX offers...

funny how CX has grown way bigger than SQ and everyone questioned CX and said their management was stupid to not launch
an LCC like QF/SQ

thankfully CX knew their was no gain in creating a competitor!!

as for expansion, do not see much from SQ, the A350's will mainly replace old aircraft

meanwhile CX is on its way to overtake SQ in Europe as well...
 
MaverickM11
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:19 am

Quoting bobdino (Reply 16):
It's not that simple. Jetstar, Air Asia, and Air Asia X are going hard. The Chinese airlines are growing like crazy. For example, in 2010, China Eastern had less-than-daily service to Australia. Shortly they will have 53 flights/week. Source: http://centreforaviation.com/analysi...13091

And that is affecting the Americas and Europe?  
Quoting lutfi (Thread starter):
◦Americas: 69.9%, -7.4 ppts;
◦Europe: 69.3%, -5.4 ppts;
Quoting Kashmon (Reply 22):
funny how CX has grown way bigger than SQ and everyone questioned CX and said their management was stupid to not launch an LCC

   Where would SQ be without the embarrassment named Scoot?
I don't take responsibility at all
 
Kashmon
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:26 am

Quoting BreninTW (Reply 4):

mainland traffic has not really grown much at CX

KA is basically the same size as 2012
they fly to a mere 17 cities... ( Gateway to China -yeah right)

most of the growth is from Korea/Japan/NA
 
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zkojq
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:42 am

So EK has a bigger effect on SQ than it does on certain airlines. But does SQ complain? No, they just up their game (new premium economy, improved the Changi transit program etc). Fantastic airline....always an absolute pleasure to fly with them.  Smilehttp://www.afr.com/lifestyle/travel/...-product-to-sydney-20150204-135emt

http://www.straitstimes.com/news/sin...d-scheme-transit-passengers-201503



[Edited 2015-03-17 23:47:11]
First to fly the 787-9
 
JayJ
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:47 am

I'm sure SQ may turn things around in time to come. The ME effect is hard on all airlines, along with the rapid explosion in route choice in the Asia pacific region.

They have always done well in and out of Australia as well as to and from South and SE Asia.

For as brilliant as the Dubai (and AUH and DOH) are for that matter, although they offer many route choices, from the Asia-Pacific region (such as Australia) Europe is really the main advantage for the ME markets. Though one can still fly to the ME to get to S and SE Asia, it can be too much of a 'backtrack' as compared to one stop through the Asian ports mentioned in the next sentence.

For passengers flying to S or SE Asia still usually go through SIN/KUL/BKK or HKG and the respective main carrier (despite the fact that EK fly to SIN/KUL and BKK) from Australia.
 
Kashmon
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:50 am

Quoting zkojq (Reply 25):

it is because unlike the west Asian countries are used to competition
not government dole under " bankruptcy protection"
 
MaverickM11
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:56 am

Quoting Kashmon (Reply 27):
Asian countries are used to competition
not government dole under " bankruptcy protection"

They're largely government owned   What do you think would happen to PR/GA/TG/MH/all Chinese carriers if the government link was cut and the markets deregulated?
I don't take responsibility at all
 
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zeke
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:57 am

Quoting zkojq (Reply 25):
So EK has a bigger effect on SQ than it does on certain airlines. But does SQ complain? No, they just up their game (new premium economy, improved the Changi transit program etc). Fantastic airline....always an absolute pleasure to fly with them.  http://www.afr.com/lifestyle/travel/...-product-to-sydney-20150204-135emt

What many people forget so easily is that SQ gained market share at the expense of Australian, NZ, and European carriers on the "kangaroo" route. Australasia used to be served by many airlines from Europe, they have progressively dies off because of SQ (and to a lesser extent TG/MH/CX).

What is clear from the Australian transport statistics is that the SQ market share has been reducing, while EK has been increasing.

I would be very interested in seeing year on year mapping of MIDT data to see where the actual traffic flows have gone.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
Kashmon
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 7:33 am

Quoting MaverickM11 (Reply 28):

you mean deregulated like HKG where anyone can start an airline?!!
when has SQ been bailed out?!!
 
MaverickM11
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 7:45 am

Quoting Kashmon (Reply 30):
you mean deregulated like HKG where anyone can start an airline?!!
when has SQ been bailed out?!!

You said...

Quoting Kashmon (Reply 27):
Asian countries are used to competition
not government dole

....which would mean more than just two airlines, no? Or are we just making sweeping generalizations without any data...?
I don't take responsibility at all
 
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zkojq
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 8:06 am

Quoting zeke (Reply 29):
What many people forget so easily is that SQ gained market share at the expense of Australian, NZ, and European carriers on the "kangaroo" route. Australasia used to be served by many airlines from Europe, they have progressively dies off because of SQ (and to a lesser extent TG/MH/CX).

Oh exactly. I remember carriers like Lufthansa, Olympic Airways, Alitalia etc were once a not so uncommon sight in Australia. With Virgin Atlantic's pull out, BA is the only European carrier that flys to Australia, I believe.
First to fly the 787-9
 
airbazar
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 1:41 pm

Quoting bobdino (Reply 16):
It's not that simple. Jetstar, Air Asia, and Air Asia X are going hard

They don't fly to Europe and the Americas.
SQ's numbers aren't that bad against those airlines, although the yields have taken a beating:
◦East Asia: 77.7%, -0.6 ppt;
◦South West Pacific: 84.9%, +5.2 ppts;
◦West Asia and Africa: 71.1%, stable;

Quoting bobdino (Reply 16):
So you can't just say "SQ are being brutalised by the ME3".

I didn't even come close to saying that.

Quoting Prost (Reply 19):
So if you can't compete on product or service, what's left?

You can compete on product and service and SQ is doing just that. They are not competing on volume. What a lot of people forget is that SQ's number were once inflated due to the lack of competition. Now we're looking at more realistic numbers. These are the numbers they would have had a decade or 2 ago if the likes of TG, MH, and GA had had their act together, IMO.
 
jfkgig
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RE: SQ Passenger Drop, ME Effect As Well?

Wed Mar 18, 2015 6:22 pm

At least as far as traffic from the Americas, I think that SQ has done a particularly poor job in competing against the ME3, and also (maybe more critically) CX, where they are really struggling to stay relevant in the market. SQ has focussed their offering on quality and service, but were wrong to believe customers would make an extra stop to fly SQ, instead of the more direct routes offered by these competitors.

CX spent many years figuring out a way to fly nonstop to the U.S. East Coast (they were amongst the first to fly nonstop from Asia to the West Coast as well) investing heavily in equipment and working closely with NAV Canada to open the polar route and successfully market nonstop flights which nobody had been able to make work before. Singapore had an even more difficult task due to geography, and has ultimately given up on non-stop flights to the United States, despite improvements in technology that make this mission more feasible than ever.

As a result, Singapore has no competitive scheduling advantage, even flying from North America to SIN, where any number of airlines (including but not limited to CX and the ME3) can offer one stop service, and many offer choices of more frequent daily flights, and usually cheaper fares. SQ's competitive position is even worse elsewhere in Asia, as it can only offer two stop service, but its competitors can offer one-stop service.

Although they don't have CX to contend with yet, the same is true in South America, where SQ offers one stop service only from GRU to SIN -- but through BCN, which adds more than 1500 miles of flying (and a sector on which they will soon be competing directly with TAM). The ME3 fly a more direct route from GRU, and EK also offers one stop service almost anywhere in Asia from GIG (2 stops to EZE). There is quite a lot of oil/shipbuilding traffic between GIG-SIN, and its all going on EK's (much less comfortable) 777L.

While SQ has (arguably) the best product, and unarguably a better product than most of its competition, it might have underestimated how some of the laggards have suddenly begun to catch up with offerings which might not be equivalent, but are now quite acceptable (i.e., DL) and offer much better fares to SIN and Asia.

So I think that the ME3 has contributed to slack passenger numbers, but that SQ has not done all they can to eliminate their advantages to the extent that they might. CX built a franchise on NYC-HKG which didn't exist previously, and SIN can do the same. Supply on this route can create its own demand, as CX has proven.
 
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VCEflyboy
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RE: SQ Passenger Drop, ME Effect As Well?

Thu Mar 19, 2015 12:55 am

The writing was on the wall.
On the kangaroo route, SQ simply cannot compete with EK offering one-stop flights to 2nd and 3rd tier European destinations.
Also, to the sophisticated Aussie frequent flyer, DXB makes an excellent 1 or 2-night stop-over with an ever-growing tourist offering.
 
jfkgig
Posts: 197
Joined: Thu Apr 14, 2011 3:45 am

RE: SQ Passenger Drop, ME Effect As Well?

Thu Mar 19, 2015 5:13 pm

Quoting VCEflyboy (Reply 35):
Also, to the sophisticated Aussie frequent flyer, DXB makes an excellent 1 or 2-night stop-over with an ever-growing tourist offering.

Perhaps not a bad place for a layover, but I think this is a point of clear advantage for SQ. I imagine that the vast majority of people would prefer to layover in SIN, if all else was equal. SQ used to promote the free layover in SIN much more frequently than I see them doing now - if they are still doing it at all. This seems like a good advantage for them to press in competing against the ME3.

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