Singapore Air turns to new plane to lure premium-paying flyers
Singapore Airlines Ltd., hurt by competition from opulent Middle Eastern carriers and a rash of budget airlines, is trying to revive its fortunes the way it knows best: wooing flyers with new aircraft.
On Thursday, the carrier will bring its first Airbus Group SE A350 jet to Singapore.
While the A350 with its extra-wide cabins and high-tech gadgets such as an entertainment system that will interact with a passenger’s mobile phone will set Singapore Air apart from local rivals, it might be too little, too late to turn around its fortunes.
Singapore Airlines will be the first carrier to acquire the A350-900 aircraft. The all-new A350 XWB will form the backbone of Singapore Airlines’ future mid-size wide-body fleet. Altogether the airline has ordered 67 A350-900s which will be operated on long range flights as well as on selected regional services. Seven of the aircraft will be delivered with an ultra- long range capability for flights of up to 19 hours, allowing the airline to resume non-stop flights to the US.
“This aircraft won’t be enough to turn the fortunes around for the airline,” said K. Ajith, an analyst at UOB Kay Hian Pte. in Singapore, who recommends buying the stock. “That shouldn’t be reason to be bullish on earnings or traffic. Bringing back the glory days -- it all depends on competition.”
Singapore Air – the only Asian carrier to fly the Concorde and the first in the world to fly the A380 superjumbo – needs new passengers to stem a slide in earnings. Operating profit has fallen 76 percent from a peak eight years ago. Sales reached a high in the year ended March 2009 as the global financial crisis crimped premium travel. The carrier is counting on cabin comforts to lure higher-end passengers used to its fully flat beds as well as more priceconscious customers.
Qatar Airways has flown the plane for a while, as has Finnair, which has a deep reach into Asia, so Singapore Air doesn’t have any bragging rights for coming first. That’s a departure from the A380 jumbo, spearheading a new dimension of luxury travel that included fully enclosed cabins in first class.
“This aircraft is hugely important for Singapore Airlines,” said Shukor Yusof, founder of aviation consultancy Endau Analytics in Malaysia. “The A350 will hopefully rejuvenate them and revive their fortunes in the premium and also the premium- economy sectors, which they are focusing on."
The new plane is part of the plan to operate a young and modern fleet, Chief Executive Officer Goh Choon Phong said in a statement Wednesday.
"The A350 will be a game-changer for us, allowing for flights to more long-haul destinations on a non-stop basis," Goh said. That will help "boost our network competitiveness and further develop the important Singapore hub.”
Singapore Air will be the fifth airline to operate the twin- aisle A350. The aircraft will begin flying to Amsterdam May 9 and Dusseldorf in July, while an ultra-long-range version is planned for nonstop flights to New York in 2018.
Goh has ordered 67 A350s to expand the fleet and better compete with Emirates and Qatar Airways Ltd., whose passenger numbers have both more than doubled in the past decade. While rising incomes in Asia are spurring air travel, budget airlines are forcing full-service carriers to provide greater value for money in the fight for customers.
Airbus says the A350 consumes 25 percent less fuel than Boeing Co.’s 777 aircraft, while its interior is 6 inches (15 centimeters) bigger than its nearest competitor. Singapore Air’s 253-seat A350 has 42 business class seats equipped with the preset lounge-style positions of “Sundeck” and “Lazy Z” that are already in its 777- 300ER aircraft. There are also 24 premium economy seats and 187 for economy.