Australia-Asia market shake-up Pt 2: SIA and Virgin in lead position as Qantas faces challenges

Singapore Airlines (SIA) is increasing focus on Australia, particularly the Australia-Asia market, as part of a strategy that sees the group rely less on long-haul routes to Europe and North America. SIA has traditionally been very strong in Australia, which accounts for 18% of its current capacity (ASKs). The group is now well positioned to tap into growing demand between Asia and Australia following its partnership and investment in Virgin Australia.

Competition in the Australia-Asia market is heating up as Qantas repositions its Singapore operation to focus on Asia. But SIA at least for now is in a stronger position than Qantas in the Australia-Asia market as Qantas lacks a sufficient number of full-service partners in Asia. Qantas is also following more of a multi-hub strategy for its Asian connection traffic after dropping plans to establish a premium carrier in the region, which gives SIA and Virgin an advantage as they are offering a more uniform and in most cases more convenient Australia-Asia product.