25-Jan-2010 12:12 PM

Singapore Airlines CEO questions long term viability of LCCs on long-haul routes

Singapore Airlines CEO, Chew Choon Seng, questioned the long term viability of LCCs operating on long-haul routes, such as Sydney-London, stating it is unlikely the carriers will be able to remain competitive on a unit-cost basis compared to full service carriers (Travel Weekly, 22-Jan-2010). Mr Chew added Singapore Airlines is able to produce better economies of scale through its mix of traffic and cargo.

AirAsia X CEO, Azran Osman Rani, stated the carrier’s unit cost for 2009 was USD 2.7 cents per ASK including fuel, compared with approximately USD 5.8 cents at Singapore Airlines (Kyodo, 23-Jan-2010). The CEO added that the carrier expects to report a “modest profit” in 2009 despite a “very difficult year”.