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Location of SilkAir main hub (Singapore Changi Airport)
349 total articles
63 total articles
Singapore has seen traffic growth slow significantly over the last year driven by challenges in its previously booming short-haul market. Total passenger traffic at Singapore Changi grew by only 5% in 2013, ending a three-year run of double digit growth, and is on pace to grow by less than 2% in 2014.
Profitability in the Singapore market meanwhile has tumbled driven by losses at Singapore’s three LCCs – Tigerair Singapore, Jetstar Asia and Scoot. Singapore Airlines regional subsidiary SilkAir also has seen profits slide as it has been impacted by the overcapacity and intense competition in Singapore’s short-haul market.
Tigerair, Jetstar Asia and SilkAir have all responded by halting or slowing down expansion. Singapore’s LCC penetration rate has started to slip, ending a decade of steady gains.
Okinawa Naha Airport expects further rapid international growth as it begins to tap into the Southeast Asian market. Okinawa has seen a surge in international traffic, driven by new flights within North Asia, and is optimistic a new charter route to Singapore (operated by Jetstar Asia and SilkAir) will be upgraded to become its first scheduled service to Southeast Asia.
International passenger traffic at Okinawa Naha Airport has nearly tripled since 2011. A new international terminal which opened in Feb-2014 is already approaching capacity but plans are in the works for expansion.
For now the growth is being driven by inbound visitor traffic as Okinawa emerges as a popular tourist attraction. But Okinawa also has a potential role as a LCC transit airport, particularly after a second runway opens and further terminal expansion is pursued. Peach Aviation envisioned an Okinawa hub for Southeast Asian flights but requires a new low-cost terminal.
Singapore Airlines SWOT: challenges continue as competition intensifies as shown by 1QFY2015 results
Singapore Airlines (SIA's) profits have dropped steadily over the last several years, driven by intensifying competition and challenging market conditions. Profits were again down in the quarter ending 30-Jun-2014 (1QFY2015), with the group recording a 52% drop in operating profits to SGD39 million (USD31 million).
But SIA remains one of the most respected airlines in the world and has never incurred an annual loss in its 42 year history. There is no denying SIA has faced in recent years - and continues to face - its biggest ever challenges. But SIA has made several strategic adjustments since Goh Choon Phong took over as CEO at the beginning of 2011.
SIA’s glory years of industry leading double digit profit margins are unlikely to return but once its new strategy beds down the group should be better positioned for long-term profitability and growth. SIA still has several core strengths and plenty of opportunities. But more challenges also lie ahead and all of its recent strategic adjustments come with risks. In this SWOT analysis we incorporate SIA's 1QFY2015 reporting.
Singapore Changi Airport is aiming to stimulate traffic growth through a series of incentives and rebates. The initiative comes in response to slower growth and a perceived widening cost gap with other Southeast Asian airports.
Changi has set aside SGD100 million (USD80 million) for its new Growth and Assistance Incentive (GAIN) programme, some of which will be used for rebates on parking and aerobridge fees. Some of the funds will also be used to provide incentives for transfer traffic as part of a programme that has not yet been detailed.
Singapore’s passenger traffic growth has slowed to only 2% in the first five months of 2014. Even slower growth is possible for the remainder of 2014 driven by a recent drop in inbound visitor numbers from China and a slowdown from Indonesia.
Singapore Airlines (SIA) is focusing on further expanding its partnership portfolio to provide a more comprehensive network and boost feed. New deals have been forged over the last six months with Air New Zealand, Asiana, EVA Air and Turkish Airlines as part of an ongoing initiative which is expected to generate more new or expanded partnerships by the end of 2014.
SIA has already more than doubled its codeshare segments over the last three years as it has added eight new partners and strengthened several existing partnerships. The group is now negotiating several more new partnerships while seeking opportunities to improve connectivity with existing partners.
In this analysis CAPA examines the increasingly important role partnerships are playing in SIA’s European, African and Middle Eastern networks. In a second part, to be published later this week, CAPA will focus on SIA’s need to rely more on partners to expand across the Americas.
Singapore Airlines incurs 4QFY2014 operating loss, adds premium economy as latest strategic response
Singapore Airlines (SIA) continues to evolve its long-term strategy in response to challenging market conditions, which drove an operating loss for the group and parent airline for the quarter ending 31-Mar-2014. The decision to introduce a premium economy product on long-haul aircraft from 2H2015 is the latest in a growing string of initiatives aimed at improving the carrier’s position.
SIA has studied premium economy for several years but repeatedly decided against a fourth class of service on long-haul flights. The group now recognises premium economy has become more mainstream and that it is necessary to be competitive, particularly in the corporate sector.
Premium economy will be introduced as SIA starts to retrofit some of its fleet with the new first, business and economy cabin products that were introduced on new 777-300ERs in late 2013. Both initiatives are part of a broader move to continue improving its service standards as competition intensifies. Increased emphasis on partnerships and a more active role in the dynamic Southeast Asian budget sector also have become important components of the still evolving SIA Group strategy.