<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 9, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Popularity of its A380 flights helps ease SIA's pain
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(SINGAPORE) Karl Ong hoped to find a quiet spot on his Singapore Airlines Ltd (SIA) flight home, betting that the recession and a drop in air travel would leave the double-decker Airbus SAS A380 half empty. He was wrong.
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</TD></TR><TR class=caption><TD>Under pressure: SIA posted a net loss of S$307m in the three months ended in June, the first since 2003. The carrier says it may report an annual loss for the first time since it went public more than two decades ago, </TD></TR></TBODY></TABLE>'I can't believe that the plane was packed and I couldn't find another empty seat anywhere else,' said the 49-year-old investment executive, who was travelling coach from Hong Kong on the world's largest commercial aircraft. 'Where is the recession? If there was one, you can't tell from this flight.'
SIA's advantage as the only airline to fly the A380 to financial centres such as Hong Kong and Tokyo is helping it lure customers like Mr Ong. The plane's appeal in the two years it has been in service could ease the pain from empty seats on other aircraft and cheaper tickets that are threatening to push the carrier into its first annual loss since 1985.
'It's certainly a competitive offering by Singapore Air to win over travellers who have not flown the A380 before,' said Steven Lim, who manages about US$200 million at Daiwa SB Investments in Singapore.
He declined to say whether Daiwa owns shares in the carrier.
SIA flew more than 1.6 million passengers on the A380 since flights with the 471-seat plane began in October 2007, filling more than 80 per cent of seats on average, said Nicholas Ionides, a spokesman for the airline. In contrast, the carrier packed an average 71.6 per cent of total available seats in the quarter ended in June.
'The A380 remains very popular with customers on all routes,' Mr Ionides noted. The US$327 million plane features beds in 12 'suites' and the widest available business-class seats.
Besides Tokyo and Hong Kong, SIA's 10 superjumbos, the most of any airline, fly to London, Paris and Sydney. The carrier, which took delivery of its latest aircraft on Monday, will add Melbourne this month. In addition to the daily A380 flights between Singapore and Hong Kong, it also flies Boeing Co 777-300ERs and 777-200s on the route.
'The A380 is deployed on very popular routes,' said Rohan Suppiah, a Singapore-based analyst at Kim Eng Securities Pte. 'If you have a choice, you would want to fly the A380 rather than a regular service.'
Emirates, the largest Arab carrier, has five A380s, and Australia's Qantas Airways Ltd has four.
SIA shares have fallen 25 per cent since the carrier's first A380 flight on Oct 25, 2007, outperforming a 56 per cent drop for British Airways plc (BA) and a 59 per cent decline for Qantas.
Packing the double-decker plane alone won't be enough to pull SIA out of a travel slump caused by the deepest recession since World War II. The A380 accounts for just 9 per cent of the carrier's fleet of 109 planes.
'They could be filling the A380, but yields may be under pressure,' said Jim Eckes, managing director of industry adviser Indoswiss Aviation. 'Carriers such as Singapore Air depend a lot on premium traffic and that's still falling.'
Revenue from premium seats sank an estimated 41 per cent in the second quarter, compared with a 33 per cent drop in the first, according to the International Air Transport Association.
SIA, which gets about 40 per cent of its revenue from premium travellers, has slashed fares to stimulate demand. Passenger yield, or average revenue per seat, tumbled 18 per cent to 10.2 Singapore cents a kilometre in the three months ended in June, the steepest quarterly drop in at least six years.
Passenger numbers fell 14 per cent in July, the ninth consecutive month of decline and the longest losing streak since at least 1991, according to Bloomberg data.
SIA posted a net loss of S$307 million in the three months ended in June, the first since 2003. The carrier said it may report an annual loss for the first time since it went public more than two decades ago.
The airline has cut pay and work days and plans to remove 11 per cent of capacity in the year through March. It is also pushing back delivery of the last eight of its total order for 19 A380s by as long as one year, to avoid having too many seats when travel demand hasn't picked up. 'The deferral will help reduce capacity, fill up their existing planes, and profitability,' said K Ajith, an analyst at UOB-Kay Hian Research in Singapore.
SIA will take delivery of its next A380 before the end of March as customers such as Mr Ong plan to fly again.
'Just the size of the aircraft alone will take your breath away,' Mr Ong said at Singapore's Changi airport. 'If I had to pick again, I will still probably choose to fly it.' - Bloomberg
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Popularity of its A380 flights helps ease SIA's pain
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Karl Ong hoped to find a quiet spot on his Singapore Airlines Ltd (SIA) flight home, betting that the recession and a drop in air travel would leave the double-decker Airbus SAS A380 half empty. He was wrong.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Under pressure: SIA posted a net loss of S$307m in the three months ended in June, the first since 2003. The carrier says it may report an annual loss for the first time since it went public more than two decades ago, </TD></TR></TBODY></TABLE>'I can't believe that the plane was packed and I couldn't find another empty seat anywhere else,' said the 49-year-old investment executive, who was travelling coach from Hong Kong on the world's largest commercial aircraft. 'Where is the recession? If there was one, you can't tell from this flight.'SIA's advantage as the only airline to fly the A380 to financial centres such as Hong Kong and Tokyo is helping it lure customers like Mr Ong. The plane's appeal in the two years it has been in service could ease the pain from empty seats on other aircraft and cheaper tickets that are threatening to push the carrier into its first annual loss since 1985.
'It's certainly a competitive offering by Singapore Air to win over travellers who have not flown the A380 before,' said Steven Lim, who manages about US$200 million at Daiwa SB Investments in Singapore.
He declined to say whether Daiwa owns shares in the carrier.
SIA flew more than 1.6 million passengers on the A380 since flights with the 471-seat plane began in October 2007, filling more than 80 per cent of seats on average, said Nicholas Ionides, a spokesman for the airline. In contrast, the carrier packed an average 71.6 per cent of total available seats in the quarter ended in June.
'The A380 remains very popular with customers on all routes,' Mr Ionides noted. The US$327 million plane features beds in 12 'suites' and the widest available business-class seats.
Besides Tokyo and Hong Kong, SIA's 10 superjumbos, the most of any airline, fly to London, Paris and Sydney. The carrier, which took delivery of its latest aircraft on Monday, will add Melbourne this month. In addition to the daily A380 flights between Singapore and Hong Kong, it also flies Boeing Co 777-300ERs and 777-200s on the route.
'The A380 is deployed on very popular routes,' said Rohan Suppiah, a Singapore-based analyst at Kim Eng Securities Pte. 'If you have a choice, you would want to fly the A380 rather than a regular service.'
Emirates, the largest Arab carrier, has five A380s, and Australia's Qantas Airways Ltd has four.
SIA shares have fallen 25 per cent since the carrier's first A380 flight on Oct 25, 2007, outperforming a 56 per cent drop for British Airways plc (BA) and a 59 per cent decline for Qantas.
Packing the double-decker plane alone won't be enough to pull SIA out of a travel slump caused by the deepest recession since World War II. The A380 accounts for just 9 per cent of the carrier's fleet of 109 planes.
'They could be filling the A380, but yields may be under pressure,' said Jim Eckes, managing director of industry adviser Indoswiss Aviation. 'Carriers such as Singapore Air depend a lot on premium traffic and that's still falling.'
Revenue from premium seats sank an estimated 41 per cent in the second quarter, compared with a 33 per cent drop in the first, according to the International Air Transport Association.
SIA, which gets about 40 per cent of its revenue from premium travellers, has slashed fares to stimulate demand. Passenger yield, or average revenue per seat, tumbled 18 per cent to 10.2 Singapore cents a kilometre in the three months ended in June, the steepest quarterly drop in at least six years.
Passenger numbers fell 14 per cent in July, the ninth consecutive month of decline and the longest losing streak since at least 1991, according to Bloomberg data.
SIA posted a net loss of S$307 million in the three months ended in June, the first since 2003. The carrier said it may report an annual loss for the first time since it went public more than two decades ago.
The airline has cut pay and work days and plans to remove 11 per cent of capacity in the year through March. It is also pushing back delivery of the last eight of its total order for 19 A380s by as long as one year, to avoid having too many seats when travel demand hasn't picked up. 'The deferral will help reduce capacity, fill up their existing planes, and profitability,' said K Ajith, an analyst at UOB-Kay Hian Research in Singapore.
SIA will take delivery of its next A380 before the end of March as customers such as Mr Ong plan to fly again.
'Just the size of the aircraft alone will take your breath away,' Mr Ong said at Singapore's Changi airport. 'If I had to pick again, I will still probably choose to fly it.' - Bloomberg
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