Has SIA lost its way ?

[Dickson]

Just saw this post (http://onemileatatime.boardingarea.c...flight-coming/) that CX is flying to yet another USA destination, Boston. This is after having launched flight to Chicago this year (and subsequently increasing the frequency to >7x / week) and Newark.

I can't help but be reminded that it seems a LONG TIME ago that SIA launched flight to a new destination. Maybe the last one was Rio de Janeiro, a few years ago? How do you grow if you're not expanding your network?

If anything, SIA seems to be retreating, in that its pulled out of Cairo, terminated its A350 flights to LAX and EWR. It seems to be playing safe by sticking to matured routes such as LHR or Aussie market for increased frequency / bigger planes, primarily taking advantage of Qantas' missteps. The only subsidiary growing is SilkAir. Maybe thats their strategy - play it safe by focusing only on LHR and Aussie markets, grow only through low cost SilkAir, cut costs.

And of course, in terms of service, since eons ago its no longer the airline whose inflight service other airlines talk about. In terms of product innovation, Emirates and Qatar seem to be leading the way. Yes, one can say that these "don't count" because they're oil rich countries and "operate on different economics". But look at how CX has managed to introduce, and then perfect, the Premium Economy product - introducing it years ago, starting it off by giving it free to Marco Polo status, then hitting that sweet spot in terms of pricing/capacity in a manner that does not canibalise its Biz class. Similarly, look at how quickly CX recovered from its initial debacle with its biz class seat, tweaked its design and rapidly introducing it across the fleet.

During this period, SIA tried having a "Suite - beyond First" class and tried to get the market to pay a premium for it, without offering anything extra other than the seat hardware. Come on, at least serve better wines or better food lah!! It took them sometime to backtrack. The website is still slow and has occasional bugs. Senior management seems to have given up talking about improving it already.

Put these together and my personal opinion is that over the last several years, SIA seems to have lost its way. This is reflected in its financial performance too - they are forced to keep reacting to the challenges posted by low-cost airlines and competition in the higher end market by aggressive carriers like CX and Middle East airlines.

Anyway, this is just my personal observation. Triggered by how CX seems to be handling the challenging market environment in a much more proactive way, compared to SIA.

[Jumbojet Lover]

First some corrections are in order...

This is after having launched flight to Chicago this year (and subsequently increasing the frequency to >7x / week)

CX launched Chicago with daily flights in September 2011, and recently increased frequencies to 10x weekly.

I can't help but be reminded that it seems a LONG TIME ago that SIA launched flight to a new destination. Maybe the last one was Rio de Janeiro, a few years ago? How do you grow if you're not expanding your network?

I believe you mean Sao Paulo. SQ does not fly to Rio. Adding new destinations is not the only way to grow. Some other means include increasing frequencies and upgauging flights to larger aircraft. SIA has also been growing it's offline network through extensive codeshares in recent years with airlines such as SAS and NZ.

If anything, SIA seems to be retreating, in that its pulled out of Cairo, terminated its A350 flights to LAX and EWR.

The A350 has not yet entered commercial service. SIA's non-stops to LAX and EWR were flown using the Airbus A340-500 aircraft.

Indeed it is sad to see SQ's shine fading, with SQ appearing to be more reactive than proactive these days to challenges in the market. Perhaps it's more of a case of being complacent and slow to react, rather than losing their way.

As for CX, their HK hub is better situated geographically for US flights, and they've been capitalizing on that. SQ once offered more capacity to North America than CX, but things have certainly changed. It's hard to compete when SQ has to offer one-stop flights. CX is also less affected by the ME carriers as they're not as big a player on the Europe-Aus market compared to SQ.

[FN-GM]

The only subsidiary growing is SilkAir. Maybe thats their strategy - play it safe by focusing only on LHR and Aussie markets, grow only through low cost SilkAir, cut costs.

Scoot is also growing. Plus SilkAir is not a low cost airline.


Also they have just announced starting a new airline with Tata Group.

NokScoot is also stating operations soon.

[qantas_flyer]

Singapore Airlines has probably realised that Dubai has become the new Singapore and more and more people are going through it. Singapore also realises that oil rich nations can capacity dump into its key markets and no amount of scheduling and friendly fare pricing can match that on a long term. I hope their joint ventures work. I know the Virgin Australia joint venture is working well. The SIA of today is far different from the 90s and 2000s.

[flyguy]

SIA have not launched any new destinations for some years and this is indeed worrying. Cthay Pacific and even Japan Airlineshave opened up new destinations, and especially mid-east airlines like Emirates have been launching easily 4 new cities every year.

[qantas_flyer]

If you want yo look at an airline that has lost its way, take a look at Qantas. It really doesn't know what to do are where to go. It has retreated from destinations like never before. And the tie up with Emirates, well, I personally don't think that's much of a help either.

[cscs1956]

Problem is Qantas lost does not means a gain for SQ. If someone else pick this up and to their advantage. SQ will be down further. Not counting those "industry action" that other airlines is facing. SQ is basically well protected for the fact that operation is base in Singapore. (ie less worry for the management team in this expect).

[MAN Flyer]

They don't seem to know whether to stick or twist at the moment, and they certainly can't make their mind up what the A380;s are supposed to be for.

If you want yo look at an airline that has lost its way, take a look at Qantas. It really doesn't know what to do are where to go. It has retreated from destinations like never before. And the tie up with Emirates, well, I personally don't think that's much of a help either.

Indeed, QF really does seem to be imploding at the moment. They, like SQ, have ploughed money and time into starting an LCC and you can't help thinking QF and SQ would have been better off concentrating on themselves rather than starting tit-for-tat LCC's in each other back yards.....

[SMK77]

SQ and QF cannot stand still and just do premium. The growth in non-premium is faster and the margins in that business are better than premium if you get it right.

Premium travel might actually reduce capacity as there is not enough demand and even SQ did not really how to get into the segment between First Class and Private Jet.

SQ would have to fear competition less if they kept delivering outstanding service more consistently. I feel (and experience) that service is not consistently overdelivering while SQ still wants to charge twice the price of competition.

[RHG]

SQ has typically structured its routes based on yield.
Isn't that why despite competitors overselling Y and then do op-ups, SQ has traditionally refused to do so.

[jammed]

I can identify with some of the issues - how I wish to be able to reach EWR in 18 hrs. But just for the discussion, what will you suggest SQ mgmt do? Not some airy fairy rant but suggestions grounded on good logic to be persuasive.

I will start by rooting for a return to direct SIN-EWR and LAX, and reverting to PEcon on those flights. The volume is definitely there esp with reintron of PE

[FN-GM]

I can identify with some of the issues - how I wish to be able to reach EWR in 18 hrs. But just for the discussion, what will you suggest SQ mgmt do? Not some airy fairy rant but suggestions grounded on good logic to be persuasive.

I will start by rooting for a return to direct SIN-EWR and LAX, and reverting to PEcon on those flights. The volume is definitely there esp with reintron of PE

Hopefully they will get the A350-900R and do this. It easy has the range.

[scooby5]

SQ has typically structured its routes based on yield.
Isn't that why despite competitors overselling Y and then do op-ups, SQ has traditionally refused to do so.

Given the scale of Cathay's recent profit announcement, in comparison to the local carrier, it would make sense to fill the plane at all costs, offering the op-ups to loyal customers who, as I've said before, spend more in a year travelling regionally in Y than the odd guy travelling once a year in J.

Whilst CX's hardware is and has been showing signs of age for a few years, nobody can hold their tactics against them.

[Metropolitan Airlines]

I think the entire SIA group is growing and adding more destinations, through Silkair, and adding focus to low yield markets by adding budget carriers.

Yes, SQ has axed CNS, but if I am not wrong, I read and SQ has indicated they will be back with MI when more B738 are being delivered.

However I agree that SQ mainline should seek for a new direction to broaden its customer base by adding more destinations and frequencies as well. For example, it is frustrating that despite aggressive additions from CX, SQ has yet to add a single red eye service from Singapore to Hong Kong, not even with MI.

Yet I wonder whether the fleet size has something to account for this constraint. Despite SQ is adding more A330s to the fleet, they are directly retiring B772s on the other hand, and so for the B77W to B773s.

SQ had B787 on order but the massive delays for delivery has triggered a rethink from the management. Perhaps when A350 is delivered towards the end of this year, we might start to see more SQ destinations?

[bent]

i think SQ is for now focussing efforts on PEY; after that, perhaps we might see newer destinations? But even so, likely to be short-medium range stations and unlikely those in Europe/Americas