<TABLE id=msgUN border=0 cellSpacing=3 cellPadding=0 width="100%"><TBODY><TR><TD id=msgUNsubj vAlign=top>
Coffeeshop Chit Chat - SIA going down?</TD><TD id=msgunetc noWrap align=right>
Subscribe </TD></TR></TBODY></TABLE><TABLE class=msgtable cellSpacing=0 cellPadding=0 width="96%"><TBODY><TR><TD class=msg vAlign=top><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR class=msghead><TD class=msgbfr1 width="1%"> </TD><TD><TABLE border=0 cellSpacing=0 cellPadding=0><TBODY><TR class=msghead><TD class=msgF width="1%" noWrap align=right>From: </TD><TD class=msgFname width="68%" noWrap>Chuck (skiscubaten) <NOBR></NOBR> </TD><TD class=msgDate width="30%" noWrap align=right>8:12 am </TD></TR><TR class=msghead><TD class=msgT height=20 width="1%" noWrap align=right>To: </TD><TD class=msgTname width="68%" noWrap>ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 2) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft rowSpan=4 width="1%"> </TD><TD class=wintiny noWrap align=right>19232.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt>Singapore Airlines Premium Traffic Continues to Wane
August 17, 2009
PrintEmail to a Friend
Summary
A slight cut in capacity may have helped system load factors for Singapore Airlines, but the missing magical barometer is that of yield. Unless that is, you know how and where to get it from.
Learn what Gerson Lehrman Group can do for you
Analysis
On the face of it, Singapore Airlines July 2009 traffic figures make for an interesting read.
Overall system load factor was up 1.1% to 69.7% YoY, but this disguises the torment the big Asian carrier is suffering while yield erosion shows no sign of stopping.
With many other operators seeing an utter bloodbath on passenger traffic in the Asia-Pacific Rim region, to assume that Singapore Airlines is somehow immune is perhaps at best a short-sighted mischaracterisation of the closed door policy of how its traffic numbers are presented in public.
In short, if one were to look at Singapore Airlines yield – you’d be forgiven for thinking you were in fact looking at British Airways’ figures.
And who could blame you.
Singapore Airlines is even considering yet another shift of its A380 deployment to key hubs like London Heathrow for the forthcoming 09/10 winter and summer periods – with the possibility of fare adjustments keeping volume in place of profit – after all, it can’t be that hard to massage traffic statistics – just like everyone thinks they have the prettiest wife at home.
Getting back to reality, the much vaunted Airbus-John Leahy concept of “breaking even on an A380” at a bizarre 65% is now beginning to hurt the Temasek powerhouse behind Singapore Airlines. Given the inherent inflexibility of the A380, exemplified so aptly during this downturn, volume sales do nothing to return profitability when you do not have the cost structure to support it.
Michael O'Leary at Ryanair is a master at it - ask him.
Witness the last quarter where the airline posted a loss for the first time in over a half decade – neatly wrapped in the statement that "if these conditions continue, the group expects to make a loss for the full year."
Singapore Airlines load factors still languish around 5% behind the IATA industry average – demonstrating that adding new airplanes with excessive/inflexible capacity such as the A380 are now hurting operations and the bottom line. No carrier can stay cash-rich forever; British Airways will testify.
The ridiculously slow pace of Singapore Airlines’ capacity reductions is starting to bite.
While they can hide the yield attrition from the bulk people, those who do have access to it understand a few of the key reasons why they’ve continued to accept A380 deliveries and its cosy relationship with Airbus.
Singapore Airlines recent traffic statistics have shown a trend of declining traffic on routes to Europe and the USA – with low cost carriers in and around Changi Airport ebbing away with lower fares and increased frequencies, you wonder sometimes how it is that Singapore Airlines isn’t further behind than it should be.
All said and done, the premium model Singapore Airlines has based itself upon is unravelling – even the likes of bellwether British Airways can see that.
For Singapore Airlines, they’ll probably realise it when it’s too late and have to play catch-up with everyone else.
</TD></TR><TR><TD> </TD></TR></TBODY></TABLE><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR><TD class=msgleft width="1%"> </TD><TD class=msgopt width="24%" noWrap>
Options</TD><TD class=msgrde width="50%" noWrap align=middle>
Reply</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>
August 17, 2009
PrintEmail to a Friend
Summary
A slight cut in capacity may have helped system load factors for Singapore Airlines, but the missing magical barometer is that of yield. Unless that is, you know how and where to get it from.
Learn what Gerson Lehrman Group can do for you
Analysis
On the face of it, Singapore Airlines July 2009 traffic figures make for an interesting read.
Overall system load factor was up 1.1% to 69.7% YoY, but this disguises the torment the big Asian carrier is suffering while yield erosion shows no sign of stopping.
With many other operators seeing an utter bloodbath on passenger traffic in the Asia-Pacific Rim region, to assume that Singapore Airlines is somehow immune is perhaps at best a short-sighted mischaracterisation of the closed door policy of how its traffic numbers are presented in public.
In short, if one were to look at Singapore Airlines yield – you’d be forgiven for thinking you were in fact looking at British Airways’ figures.
And who could blame you.
Singapore Airlines is even considering yet another shift of its A380 deployment to key hubs like London Heathrow for the forthcoming 09/10 winter and summer periods – with the possibility of fare adjustments keeping volume in place of profit – after all, it can’t be that hard to massage traffic statistics – just like everyone thinks they have the prettiest wife at home.
Getting back to reality, the much vaunted Airbus-John Leahy concept of “breaking even on an A380” at a bizarre 65% is now beginning to hurt the Temasek powerhouse behind Singapore Airlines. Given the inherent inflexibility of the A380, exemplified so aptly during this downturn, volume sales do nothing to return profitability when you do not have the cost structure to support it.
Michael O'Leary at Ryanair is a master at it - ask him.
Witness the last quarter where the airline posted a loss for the first time in over a half decade – neatly wrapped in the statement that "if these conditions continue, the group expects to make a loss for the full year."
Singapore Airlines load factors still languish around 5% behind the IATA industry average – demonstrating that adding new airplanes with excessive/inflexible capacity such as the A380 are now hurting operations and the bottom line. No carrier can stay cash-rich forever; British Airways will testify.
The ridiculously slow pace of Singapore Airlines’ capacity reductions is starting to bite.
While they can hide the yield attrition from the bulk people, those who do have access to it understand a few of the key reasons why they’ve continued to accept A380 deliveries and its cosy relationship with Airbus.
Singapore Airlines recent traffic statistics have shown a trend of declining traffic on routes to Europe and the USA – with low cost carriers in and around Changi Airport ebbing away with lower fares and increased frequencies, you wonder sometimes how it is that Singapore Airlines isn’t further behind than it should be.
All said and done, the premium model Singapore Airlines has based itself upon is unravelling – even the likes of bellwether British Airways can see that.
For Singapore Airlines, they’ll probably realise it when it’s too late and have to play catch-up with everyone else.
</TD></TR><TR><TD> </TD></TR></TBODY></TABLE><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR><TD class=msgleft width="1%"> </TD><TD class=msgopt width="24%" noWrap>
