CAPA:SQ promotes ASEAN-EU/Japan/Korea open skies to gain USA fifth freedom flights

[chiraagnt]

Interesting article in CAPA today regarding SQ and its pushing for more rights..

Any ideas on which intermediary points and USA destinations can work for SQ? I know they're pushing for ICN and HKG to be more liberal, but to where? BOS/YVZ/ATL?

Linking Asia with North America has been the market cornerstone for Korean Air and Cathay Pacific while producing a growth market for relatively new entrants like ANA and EVA Air. Yet, while northeast Asian airlines have the geography for profitable nonstop North America flying, southeast Asian airlines are challenged in serving the route.

Singapore Airlines feels the need for a significant North American presence to diversify its network and offset pressure from Gulf airlines, which have profoundly weakened SIA in its core Asia-Europe and Australia-Europe markets. Although Singapore Airlines plans to resume nonstop North American flights, these are token services for strategic purposes.

The primary objective has to be securing more fifth freedom rights for one-stop service. Singapore is encouraging the ASEAN bloc to secure open skies with Japan, Korea and the EU since open skies will entail unlimited fifth freedom rights. Korea is unlikely to agree, with Japan hesitant. Fifth freedom liberalisation is a contentious item in the otherwise benign EU-ASEAN negotiations. Countries worry that granting unlimited fifths opens Pandora's box to growth – not just from SIA, but any number of airlines that are quiescent today but could aspire to be powerhouses in the future.

[Spaniard]

Interesting article in CAPA today regarding SQ and its pushing for more rights..

Any ideas on which intermediary points and USA destinations can work for SQ? I know they're pushing for ICN and HKG to be more liberal, but to where? BOS/YVZ/ATL?

http://europa.eu/rapid/press-release_IP-16-2065_en.htm

The EU has given green light for negotiations towards an open skies agreement to start with ASEAN, the press release calculates the positive impacts of such agreement on a timeframe between 2017 and 2023 which suggests a form of it could be in place as early as next year.

This could be a massive opportunity coupled with very good timing for SQ. Opening fifth freedom rights in EU airports together with the availability of the A350 to allow for thinner yet more profitable routes has the potential to become a game changer.

Admittedly biased but using Madrid as an intermediate port could be the gateway to South America (think Buenos Aires, Santiago de Chile, Mexico, Caribbean destinations...), together with other US East Coast destinations (Miami?) and why not, North Africa. This could also be the solution for BCN as currently Iberia does not operate long haul out of BCN.

Definitely something to keep an eye on!

[SQ36]

I hope SIA gets more fifth freedom rights too, but afraid it's not so simple. For fifth freedom flights from Singapore to City X to City Y to work, you need significant demand from:

1) Singapore to City X and vice-versa;
2) Singapore to City Y and vice-versa; and
3) City X to City Y and vice-versa.

And perhaps some feed into and out of Singapore for Cities X and Y from codeshares, SilkAir, Scoot, Tiger etc.

It's not easy to find such "triplets" of cities. Even though Iberia doesn't fly long haul out of BCN, the SIN-BCN-GRU was in trouble as soon as LATAM started GRU-BCN.

As nice as it would be for SIA to diversify its network with South America and Africa, I think only North America is going to work. Possibly Chicago, Seattle, Vancouver, Toronto, Boston, Washington DC.

And this is if countries give more fifth-freedom rights. Don't think Japan, Korea, China and Hong Kong will do so. That leaves the EU and Taiwan.

[Spaniard]

I hope SIA gets more fifth freedom rights too, but afraid it's not so simple. For fifth freedom flights from Singapore to City X to City Y to work, you need significant demand from:

1) Singapore to City X and vice-versa;
2) Singapore to City Y and vice-versa; and
3) City X to City Y and vice-versa.

And perhaps some feed into and out of Singapore for Cities X and Y from codeshares, SilkAir, Scoot, Tiger etc.

It's not easy to find such "triplets" of cities. Even though Iberia doesn't fly long haul out of BCN, the SIN-BCN-GRU was in trouble as soon as LATAM started GRU-BCN.

As nice as it would be for SIA to diversify its network with South America and Africa, I think only North America is going to work. Possibly Chicago, Seattle, Vancouver, Toronto, Boston, Washington DC.

And this is if countries give more fifth-freedom rights. Don't think Japan, Korea, China and Hong Kong will do so. That leaves the EU and Taiwan.

Absolutely correct - competition will always be there and then it becomes a matter of pricing, schedule, product, etc. I concur on your view regarding North America as well, as I said, it's pretty much wishful thinking on my end that SQ would fly non stop to Madrid . Another challenge is the lack of Star alliance feeder in Spain since Spanair closed, unless they expand their agreements with air Europa.

[SQ36]

Absolutely correct - competition will always be there and then it becomes a matter of pricing, schedule, product, etc. I concur on your view regarding North America as well, as I said, it's pretty much wishful thinking on my end that SQ would fly non stop to Madrid . Another challenge is the lack of Star alliance feeder in Spain since Spanair closed, unless they expand their agreements with air Europa.

Spaniard, I too would love SQ to fly to Madrid again. Would you know how much premium demand there is in and out of Madrid?

I still think it's more likely to be Scoot - after Athens CAPA thinks that Scoot will announce a second European destination

[SMARTDODO]

And this is if countries give more fifth-freedom rights. Don't think Japan, Korea, China and Hong Kong will do so. That leaves the EU and Taiwan.

Doesn't SIA has 5th freedom rights between Taiwan and USA? They used to fly to LAX via TPE. Can't SIA just extend one of the TPE flights to fly to USA / Canada?

[SINFJ]

Doesn't SIA has 5th freedom rights between Taiwan and USA? They used to fly to LAX via TPE. Can't SIA just extend one of the TPE flights to fly to USA / Canada?

Given that there may be demand from SIN, O&D traffic exTPE might be limited given the likes of CI and BR as domestic players. CX cuts a fair share into the pie with very reasonable fare as a one hop via. HKG.

[Spaniard]

Spaniard, I too would love SQ to fly to Madrid again. Would you know how much premium demand there is in and out of Madrid?

I still think it's more likely to be Scoot - after Athens CAPA thinks that Scoot will announce a second European destination

I'll try to do some research and post any results here. The thing is Spain is largely disconnected from Asia and only recently certain non stop destinations are being resumed (Iberia to Tokio and Shanghai) after a long hiatus not serving Asia. Probably due to the merger with BA, Iberia focused on Latam but given the constraints in LHR some growth is being seen in MAD.

[ninervictor]

Doesn't SIA has 5th freedom rights between Taiwan and USA? They used to fly to LAX via TPE. Can't SIA just extend one of the TPE flights to fly to USA / Canada?

Difficult route for SQ. Sometimes this route sells at S$600-700 (round trip) during promotion, but via HKG.

[Dobbo]

I've been giving this some thought, and think that that (aside from SQ's objectives) the key points are geography, and the strength of the market.

From a geographical perspective, the start point has to be: East Coast works best via Europe, West Coast via North East Asia.

"Landlocked" American cities are less obvious but I suppose Chicago is more likely to suit a via NE Asia route, whereas Atlanta would suit a via Europe route.

SQs objectives. Is a route intended primarily to link SIN to the relevant US city or does the intervening market have a material role to play in the route viability? Might SQ want consistency, sending a number of routes via the same European or NE Asian airport? In Europe at least the 5th freedom routes have been traditionally spread out and may be used to make thin routes more viable. Will this trend continue?

Which US cities look the most likely to benefit? Chicago & Seattle via NE Asia? Boston, Washington, Miami, Atlanta via Europe? Might changes to existing routes form part of the plan? Where are the aircraft coming from?

If you rule out the major hubs served by SQ (LHR, CDG, FRA, AMS & Istanbul) where are the most obvious candidates?

MAN has the IAH route, might another route work? Say to ORD (contrary to what I say above!) work well?

BCN/MAD may make sense to South America, but that market has tanked. Perhaps Northern Europe is a better option?
DUS or a Scandinavian route make sense?
DUB? Might a U.S. Tag make this route viable?

Perhaps it's a double bluff. SQ have a codeshare with Turkish to various US destinations so perhaps that's what they will do moving forwards?

[Pinkfloyd]

A tag on to OSL would have made sense when the Oil & Gas industry was still lucrative... Not too sure about now though...

[leops1984]

If SQ is going to do more 5th freedom routes to the US maybe IAH-MAN would be the template moving forward - i.e., a European city with good demand but limited longhaul flights, and an American city providing multiple connections and/or strong local demand.

The one city that makes a lot of sense looked that way in Europe is BCN, but there could be others. On the US side, I would look at cities with good United or JetBlue service - so ORD, BOS, and EWR would be my top three most likely choices for new SQ routes in the long run. I can't see SQ jumping into an American city that's a fortress of another alliance, though - they'd have no feed. I'd rule out ATL for that reason, and probably MIA too.

[SQ228]

.Perhaps Northern Europe is a better option?
DUS or a Scandinavian route make sense?

You might really be onto something there. Very little competition out of DUS to US destinations. The only longhaul LH flies out of DUS is to EWR. No US airlines fly to DUS. The only competition is with AB, who cover LAX, BOS, MIA, SFO, JFK, RSW and from next May plan to start ORL.

SQ's product and service would easily outstrip anything AB could dream of offering. Only their A330s feature anything but Y and even then its only 19 seats. AB is oneworld with a huge stake held by EY. LH couldn't complain because they totally deserted DUS, downgrading it to a LCC hub. DUS as an airport was desperate to attract SQ.

[Dobbo]

Quite possibly. DUS and MAN are similar in the sense that they have a large carchment area but are not served by the national flag carrier. Services into *A hubs in the US may well work. I suspect that USPBC at MAN would be attractive to SQ.

[SQfanatic]

I hope one day SQ flies to Seattle (along with airlines like CX that don't fly to SEA). I don't mind if it's a 5th freedom route by a Boeing 777-300ER. I was suggesting this because I took a trip to Seattle with my parents and with my thorough evaluation of the entire Seatte Area and Western Washington State (Places like Bellevue I stayed at are extremely diverse especially with Asians and Indians), I would love to live there after I graduate college and land up a job there. Sadly EK is the only option to fly to South India. Hopefully SQ will do something like:

SIN-HND-SEA and vv