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Based at Singapore Changi Airport, Singapore Airlines is the national carrier of Singapore. Using a fleet of wide-body Boeing and Airbus aircraft, including the A380 of which Singapore Airlines was the launch customer, Singapore Airlines operates an extensive network across Asia, North America, Australasia, Europe, Africa and the Middle East. Singapore Airlines joined the Star Alliance on 01-Apr-2000.
Location of Singapore Airlines main hub (Singapore Changi Airport)
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1,936 total articles
NT Airports welcomes Virgin Australia's announcement regarding the launch of intra-territory service
335 total articles
Singapore short-haul LCC market remains challenging despite adjustments at Jetstar Asia and Tigerair
Overcapacity continues to impact Singapore’s LCC sector, pressuring yields and resulting in unsustainable losses. But the market could start to see improvements in 2015 driven by capacity adjustments and increased reliance on partnerships.
Singapore’s two short-haul low-cost carriers, Jetstar Asia and Tigerair, have both been unprofitable since early 2013 as the market failed to absorb a surge in capacity. But Tigerair has started to reduce capacity in recent months while Jetstar has modestly increased capacity without increasing its fleet.
Both LCCs meanwhile are expanding transit traffic and partnerships. By relying less on Singapore’s relatively limited local market, Jetstar Asia and Tigerair Singapore should be able to eventually improve yields to a sustainable level.
Singapore Airlines (SIA) and its regional subsidiary SilkAir remained profitable in the quarter and half ending 30-Sep-2014 despite extremely challenging market conditions in Southeast Asia. But the group’s net profit has been on the decline due primarily to the heavy losses at LCC affiliate Tigerair.
SIA is now in the process of increasing its stake in Tigerair which pending approvals will result in the LCC becoming a subsidiary. SIA is not considering taking over Tigerair entirely and instead will focus on pursuing synergies, particularly with its long-haul LCC subsidiary Scoot, while supporting Tigerair’s ongoing turnaround efforts.
SIA’s long-term outlook is relatively bright but several components of its strategy, including its investments in the LCC sector and its new full-service joint venture in India, will likely continue to have a negative impact on earnings for the short to medium term. The fact the SIA Group has so far been able to stay in the black overall is a noteworthy accomplishment.
Virgin Australia has unveiled plans to acquire the remaining 40% stake of Tigerair Australia for a token sum of AUD1, enabling Singapore-based Tiger Airways Holdings to essentially end its unsuccessful pan-Asia Pacific strategy.
Tiger, which earlier this year sold its stake in Tigerair Philippines and exited the Indonesian market with the suspension of services at Tigerair Mandala, is now focusing on turning around around its Singapore operation. But the Tigerair Australia brand will be retained and the Tigerair brand is also now present in Taiwan, where the group owns only a 10% stake in recently launched Tigerair Taiwan.
The biggest benefit to Virgin could be appeasing its shareholder Singapore Airlines (SIA), which is set to increase its stake in Tiger Holdings from 40% to at least 55%. The agreement could also see Tigerair Australia operate short-haul international routes. Previously Virgin and Tigerair showed no interest in such deployment of Tigerair as Tigerair Australia, which has been consistently unprofitable since launching services in 2007 and has been focusing on improving its performance in the domestic market.
Ethiopian Airlines to continue Asia expansion with Singapore non-stops, giving Changi a needed boost
Singapore Changi is poised to emerge as the Asian hub for Ethiopian Airlines as the African flag carrier looks to introduce non-stop flights on the Addis Ababa-Singapore route in 2015. The new flight could lead to a further strengthening of the Ethiopian Airlines-Singapore Airlines partnership, which already includes seven destinations in Australasia.
The launch of non-stop flights to Ethiopia would be the most significant accomplishment yet in Changi’s push to establish a foothold in the fast expanding Asia-Africa market. Local traffic between Singapore and Africa is very limited but Africa can potentially emerge as an important new source for transit passengers, unlocking new growth as Singapore’s traffic figures start to flatten.
Ethiopian Airlines has been contemplating serving Singapore non-stop and making Changi its hub for offline destinations in Asia-Pacific since it joined the Star Alliance in late 2011. A final sweetener could be Singapore’s newly introduced incentive for long-haul flights and transit passenger growth.
Singapore Changi Airport and CAAS are trying to promote new long-haul flights and more transit traffic in response to a significant slowdown in passenger growth. Singapore is eager to drum up new sources of traffic or growth as it invests significantly in airport expansion which will prove to be overly ambitious if growth cannot be restored.
Incentivising transit traffic is logical as a growth in transit numbers, long a staple under Singapore’s hub strategy, could help offset a recent drop in inbound visitor numbers. Following Kuala Lumpur's example, Singapore will probably need to focus on enhancing LCC transit traffic, an increasingly important segment which Changi has barely scratched.
Long-haul transit traffic growth will be much harder to achieve, even with incentives. Changi’s biggest growth opportunities are likely on medium-haul routes and connections within Asia-Pacific.
SilkAir is joining Singapore’s main LCC groups in slowing down expansion in response to overcapacity in Singapore’s short-haul market. SilkAir capacity growth has been in the low single digits in recent months and will likely stay at modest levels as it accelerates the retirement of A320s.
The full service regional subsidiary of Singapore Airlines, SilkAir has expanded rapidly over the past several years despite intensifying competition with LCCs. SilkAir has doubled in size since 2007 and has consistently outperformed Singapore’s two short-haul LCCs, Tigerair and Jetstar Asia, in the process securing valuable slots at Changi Airport for the group.
SilkAir has been planning to maintain annual double digit capacity growth, driven by the introduction of new 737-800s. But a slowdown is sensible given the current overcapacity situation in the Singapore short-haul market, which has led to a steep drop in profits at SilkAir as well as at LCC competitors.