Singapore Airlines announced (21-Jan-2011) it will increase its fuel surcharge for fares issued on or after 27-Jan-2011, as a result of the recent escalation in the price of jet fuel. The price of jet fuel is now above USD110 per barrel. They represent an increase of between USD3 and USD27 per sector, depending on the distance and class of travel. The new levels will apply to Singapore Airlines and SilkAir services. [more]
Singapore Airlines to increase fuel surcharges
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SIA Group continues China expansion with new Dalian and Fuzhou services from Scoot and SilkAir
The Singapore Airlines (SIA) Group is continuing to pursue rapid expansion in China with the launch of services to Dalian by Scoot and to Fuzhou by SilkAir. The addition of Dalian and Fuzhou will extend the group’s Chinese network to 25 destinations in Nov-2016.
Scoot launched Shenyang as a one-stop service via Qingdao in 2013; it is now upgrading the route to nonstop. Shenyang will give Singapore Changi 25 nonstop destinations in China – more than any other airport in Southeast Asia. Fuzhou is already served from Singapore, while Dalian will initially be served as a one-stop product via Qingdao.
Maintaining a leading network in China is an important component of the current SIA Group strategy. It is also essential, since SIA is unable to codeshare on domestic services within China due to regulatory restrictions.
Scoot 2017 outlook: challenging market conditions and Europe launch could impact profitability
Singapore Airlines (SIA) medium long haul LCC subsidiary Scoot faces a potentially challenging 2017 as it launches flights to Europe and merges with the short haul LCC Tigerair. Scoot is also planning a series of network and schedule adjustments, which are critical to the future success of the European routes and long-term profitability.
Scoot has been successful in the initial four and a half years since its mid-2012 launch, becoming profitable in a relatively quick timeframe and unlocking a new phase of growth for the SIA Group. However, 2017 will bring intense competition and ambitious expansion in markets that are not likely to be profitable in the short to medium term.
Scoot’s newfound profitability could be at risk due to yield pressures, higher fuel costs and expenses related to new long haul route launches. Scoot and its ongoing integration with Tigerair are necessary strategically, and should improve the SIA Group’s long-term position, but the short-term outlook is relatively cloudy.