Singapore Airlines (SIA) faces challenging market conditions in 2017 as fierce competition and overcapacity continue to pressure yields. The parent airline’s capacity, which is now below 2008 levels, will again be relatively flat.
SIA has responded to structural changes in the industry by growing its budget airline subsidiaries while reinforcing the premium position of its parent airline through a series of investments. In 2017 these investments will continue as premium economy is incorporated on more aircraft and new long haul business and first products are introduced.
SIA’s position in the long haul market has been significantly impacted by ambitious expansion and aggressive pricing from Gulf and North Asian airlines. The short-term outlook is relatively bleak, with further yield declines impacting profitability.