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Emirates, boosted by Jetstar Asia, will become the largest foreign full service airline in Singapore

Emirates is poised to overtake Cathay Pacific as the largest foreign full service airline in the Singapore market from early 2016 as it upgauges two of its seven daily Singapore flights to the A380. Emirates will have almost 42,000 weekly seats in Singapore in Mar-2016, a 12% increase over its current capacity and a 29% increase compared to Mar-2014.

Emirates has been a key contributor to growth in Singapore over the last two years during an otherwise very slow period for Changi Airport. The expansion would not have been possible without a new and fast growing partnership with Singapore-based LCC Jetstar Asia.

Jetstar Asia has enabled Emirates to use Singapore as a regional hub for Southeast Asia. Emirates already had hub status at Singapore with three fifth freedom destinations along with four daily non-stop flights from its main hub in Dubai.

Emirates further expands in Singapore as another A380 is introduced

Emirates is currently the eighth largest airline in Singapore and the fourth largest full service carrier after Singapore Airlines (SIA), SIA regional subsidiary SilkAir and Cathay Pacific. It is Singapore’s largest carrier from outside Asia Pacific by a wide margin as the next largest, Qatar Airways, has less than one third the capacity of Emirates despite adding a third daily flight to Singapore in Jun-2015.

Emirates currently has seven daily flights from Singapore, including four to Dubai and one each to Brisbane, Melbourne and Colombo. The Sri Lanka flight continues onto Dubai, giving Emirates five daily flights to its main hub when including the one-stop via Colombo, while Brisbane and Melbourne are tags on two of its four Dubai non-stops.

Cathay Pacific has between eight and nine daily flights to Singapore, including one to Bangkok and between seven and eight to Hong Kong depending on the day of the week. Cathay currently deploys five aircraft types to Singapore with various configurations but on average has roughly 39,000 weekly seats at Changi. (Note: Cathay’s actual capacity to Singapore varies by up to 2,000 seats depending on the time of year as Cathay uses larger gauge aircraft during peak periods but the overall average is approximately 39,000 seats.)

Emirates currently has 37,478 weekly seats to Singapore. This is an exact figure as it currently uses 360-seat 777-300ER on six of its seven daily Singapore flights and a 517-seat A380 on one of its four Dubai non-stop flights. (Note: Emirates for operational reasons occasionally has to serve Singapore with a 777 in a different configuration.)

Emirates has unveiled plans to upgauge its daily Dubai-Singapore-Melbourne flight to the 517-seat A380 from 1-Mar-2016. This will give Emirates 41,874 weekly seats to Singapore, putting it ahead of Cathay.

Top five full carriers ranked on weekly seat capacity: Mar-2016 versus Nov-2015 and Mar-2014

Rank Airline Mar-2016 Nov-2015 Mar-2014
1 EK Emirates Airline 41,874 37,478 32,438
2 CX Cathay Pacific 39,000 39,000  43,000
3 GA Garuda Indonesia 30,000 30,000  30,000
4 MH Malaysia Airlines 24,800 24,800  20,000
5 TG Thai Airways 21,600 21,600  21,000

Emirates A380 further intensifies competition between Singapore and Melbourne

Emirates has steadily expanded in the Singapore market over the last several years. The first A380 was introduced in Dec-2012 when Emirates upgauged what at the time was its only Dubai-Singapore turnaround flight.

The next wave of expansion for the Singapore market came in Aug-2014 as Emirates added a fourth daily non-stop flight (and a second turnaround flight) using a 777-300ER. The additional flight resulted in 720 additional daily seats in the Singapore market, which equated to an expansion of 16%.

Over the last 15 months Emirates has maintained capacity in Singapore but has been considering for some time deploying a second A380. As the second A380 will be used on the Dubai-Singapore-Melbourne flight it will result in 628 additional daily seats for the Singapore market, or 157 per sector, generating a 12% increase in total seat capacity in Singapore.

This consists of 314 more daily seats between Singapore and Dubai and 314 more seats between Singapore and Melbourne. Singapore-Melbourne is a much larger and more competitive local market than Singapore-Dubai. The Singapore-Melbourne route already has had a spike in capacity driven by the 1-Nov-2015 launch of services by SIA medium/long haul LCC Scoot, which became the fifth carrier with non-stop flights in the Singapore-Melbourne market after SIA, Qantas, Jetstar Airways and Emirates.

SIA currently has four daily flights in the Singapore-Melbourne market with a fifth frequency added during peak period. Qantas and partner Emirates each have one daily flight while Scoot and Jetstar have five weekly frequencies with Scoot increasing to daily during peak periods. Emirates’ decision to upgauge its Singapore-Melbourne flight from the 777-300ER brings back the A380 to the Singapore-Melbourne market after SIA withdrew the A380 from one of its Melbourne flights in Oct-2014.

Singapore is Emirates’ second largest destination - after Bangkok

Emirates already deploys the A380 on its only Dubai-Melbourne non-stop flight, which continues on to Auckland. Qantas also operates the A380 on its daily Melbourne-Dubai-London flight and seven of its 10 weekly flights from Melbourne to Los Angeles. Auckland, Dubai, Los Angeles and soon again Singapore are the only A380 destinations from Melbourne.

Emirates currently has a total of four daily flights from Melbourne, three of which will be operated with the A380 from Mar-2015, leaving only Melbourne-Kuala Lumpur-Dubai with the 777-300ER. Emirates’ total capacity to Melbourne will increase to about 26,000 weekly seats in Mar-2016, making it Emirates 12th largest destination based on seat capacity.

Singapore Changi is currently Emirates’ second largest destination after Bangkok Suvarnabhumi

Emirates currently has 102 weekly frequencies at Changi (SIN), including the 98 weekly or seven daily return passenger frequencies and four weekly freighter frequencies. Emirates operates its 777F on two weekly flights on a Dubai World Central (DWC)-Singapore-Sydney-Singapore-Dubai World Central rotation.

The current eight daily flights on Bangkok give Emirates a total of 112 weekly frequencies at Suvarnabhumi (BKK) , including four (and from Dec-2015 five) with the A380, compared to the seven for Singapore including one (and from Mar-2016 three) with the A380. Bangkok will retain its role as the largest destination in the Emirates network.

Emirates top 10 destinations/hubs ranked by weekly frequencies to/from: 2-Nov-2015 to 8-Nov-2015

Emirates is expanding capacity in Bangkok at an even faster clip than Singapore as the additional Bangkok A380 flight, which is being introduced from 1-Dec-2015, will be operated with Emirates’ new 615-seat two class A380. This will give Emirates four daily A380 flights on Dubai-Bangkok along with two daily 777-300ER flights. Emirates also operates Bangkok-Hong Kong with A380s and Bangkok-Sydney with 777-300ERs.

Emirates expands premium capacity in Singapore by another 21%

Emirates has no intention of deploying the 615-seat A380 to Changi as Singapore has a much larger premium market than Bangkok or Kuala Lumpur, which will receive the 615-seat A380 from 1-Jan-2016.

Emirates has kept a first class product on all seven of its Singapore flights, including Colombo. It currently offers 868 first class seats in the Singapore market, making it the second largest first class carrier in Singapore by a wide margin. SIA obviously remains the market leader as it has a first class cabin across its fleet of 19 A380s and 26 777-300ERs.

After Emirates upgauges Dubai-Singapore-Melbourne to the A380 it will have 1,036 weekly first class seats in Singapore. Its weekly business class capacity in Singapore will also increase from 4,592 seats to 5,544 seats. Emirates will therefore have 6,580 weekly premium seats in Singapore in Mar-2016, an increase of 21% compared to currently.

Emirates’ share of premium seat capacity in Singapore will increase to approximately 10%. Its share of total seat capacity in Singapore will increase to about 2.9%, according to CAPA and OAG data.

Three years ago, in Nov-2012, Emirates had only about a 2.1% share of seat capacity in Singapore. The expansion by Emirates has been crucial for Singapore as Changi has seen traffic growth slow significantly over the last three years. Changi passenger growth slowed to 5% in 2013, ending three consecutive years of double digit growth, and slowed again to less than 1% in both 2014 and 1H2015.

Jetstar Asia partnership has been driver in Emirates’ Singapore expansion

A new partnership with Singapore’s second largest LCC, Jetstar Asia, has helped facilitate the expansion at Emirates, providing regional feed which Emirates previously did not have at Changi. As CAPA highlighted in an analysis report from earlier this week, the partnership also has helped facilitate a turnaround over the last year at Jetstar Asia. Emirates is now Jetstar Asia’s largest single partner.

See related report: Singapore LCCs part 3: Jetstar Asia increases focus on interline traffic and secondary destinations

The fourth daily non-stop flight from Dubai to Singapore was particularly made possible by the Emirates partnership as this flight was timed to arrive in the morning, resulting in significantly improved connection times to several key Jetstar Asia destinations. The fourth flight was introduced on 1-Aug-2014, or just four months after Emirates began codesharing with Jetstar Asia.

The codeshare with Jetstar Asia initially included 10 destinations with three more added in Oct-2014 for a total of 13. Jetstar Asia’s nine other destinations are covered with an interline arrangement as bilateral restrictions preclude a codeshare on some routes.

Jetstar Asia-Emirates codeshare destinations

Darwin

Bangkok

Phuket

Siem Reap

Phnom Penh

Ho Chi Minh

Penang

Hong Kong

Jakarta

Denpasar

Kuala Lumpur

Medan

Yangon

Of the 13 destinations currently covered in the codeshare six are offline destinations for Emirates – Darwin in Australia, Penang in Malaysia, Medan in Indonesia, Yangon in Myanmar and Phnom Penh and Siem Reap in Cambodia.

Darwin particularly has been a popular connecting destination as Emirates passengers previously were only able to access northern Australia by backtracking from other Australian destinations. Yangon, Phnom Penh and Siem Reap are also popular offline destinations for Emirates but these are also served via Bangkok using full service regional carrier Bangkok Airways.

Bali in Indonesia was one of the largest – and probably the largest – Jetstar Asia codeshare destination for Emirates until Jul-2015, when Emirates launched non-stop flights from Dubai to Bali. Emirates obviously noticed it was carrying sufficient traffic to Bali via Singapore to justify a non-stop service.

While the launch of Bali non-stop flights has impacted Jetstar Asia connection traffic, this is often a trade off of any successful partnership. Jetstar Asia should be able to fill the void by carrying more Emirates passengers to other destinations, including three new destinations it is launching by the end of 2015 – Da Nang in Vietnam and Palembang and Pekanbaru in Indonesia. (These are all secondary destinations that are not currently served by Emirates.)

In deciding to launch its own flights to Bali, Emirates also likely noticed the success rival Qatar Airways was enjoying in the Bali market. Qatar launched non-stop service from Doha to Bali in Jul-2014 and already added a second daily flight on the route in Jul-2015.

Qatar Airways expands in Singapore but gap with Emirates is still huge

Qatar had previously served Bali with a one-stop product via Singapore. Qatar now serves Singapore with three daily turnaround flights.

The third flight was added on 1-Jun-2015. Qatar currently operates three daily A350 flights to Singapore, giving it 11,886 weekly seats in the Singapore market – more than any other non-Asian carrier after Emirates.

See related report: Qatar Airways pursues rapid expansion in Singapore after the first A350 lands at Changi

While Qatar interlines with Jetstar Asia and other airlines in Singapore it relies almost entirely on the local Singapore market. Etihad also relies entirely on the local Singapore market but has only 3,290 weekly seats in Singapore. Etihad decoupled Singapore and Brisbane on 1-Jun-2015, giving Emirates one less competitor in the Singapore-Brisbane market, and currently serves Singapore with one daily 787-9 flight from Abu Dhabi.

Gulf carrier weekly seat capacity at Singapore: as of Mar-2016

Rank Airline First Business Economy Total Seats
1 EK Emirates Airline 1,036 5,544 35,294 41,874
2 QR Qatar Airways N/A 1,512 10,374 11,886
3 EY Etihad Airways 112 392 2,786 3,290

Once it introduces the additional A380 flight Emirates will have three and a half times more seat capacity in Singapore than Qatar and nearly 13 times more capacity than Etihad. But unlike its two Gulf rivals Emirates uses Singapore as a hub, offering codeshare connections with Jetstar Asia and Qantas as well as its own Singapore stopovers. As previously highlighted by CAPA, a majority of Emirates' passengers on the Dubai-Singapore-Melbourne and Dubai-Singapore-Brisbane flights are heading to Australia.

See related report: Singapore Aviation Part 2: Emirates & Qatar expand. SIA drops Europe capacity, adds premium economy

Emirates to grow local Singapore market share while further expanding use of Singapore as a hub

Emirates should be able to grow transit traffic in Singapore further as it upgauges Dubai-Singapore-Melbourne to the A380 and continues to expand its partnership with Jetstar Asia. Inevitably it will also grow its share of the local Singapore market, intensifying competition with SIA.

Emirates is already the second largest airline after SIA in the Singapore-Europe market, carrying approximately a 14% share of passengers (includes non-stop and one-stop traffic). It also has a small but growing share of the Singapore-North America market. Competition is already intense in both these markets, with Qatar particularly making a push over the last year, but Emirates has the scale and cost structure to continue gaining market share.

Singapore has quietly become Emirates’ second largest destination after Bangkok, which is a much larger local market.

Nevertheless, Singapore is in many respects more a hub than a destination for Emirates, a position reinforced as Emirates becomes the only A380 operator on the Singapore-Melbourne route and overtakes Cathay as the largest foreign full service carrier in the Singapore market.

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