
A380 Jumbo plane
Singapore Airlines’ Last A380 Ends Jumbo-Jet Orders
06 Sep 2012
Singapore Airlines Ltd. (SIA) receives its 19th Airbus SAS A380 Wednesday, leaving the biggest buyer of jumbo jets with none on order for the first time in 30 years.
The handover for the 409-seat aircraft in Toulouse, France, comes as the airline builds future growth around smaller long- haul planes amid falling passenger numbers and competition from Gulf carriers. The company is also boosting its focus on regional routes with unit SilkAir ordering 54 Boeing Co. (BA) 737 planes because of rising Asian travel.
“Singapore Air probably won’t be spending so much on long- haul now,” said Rigan Wong, an analyst at Citigroup Inc. in Hong Kong. “It doesn’t make sense in terms of the economic growth story.”
The carrier has bought 112 A380s and Boeing Co. 747s since 1972 as it developed a global network alongside a government push to turn the city-state into a hub linking Europe, Asia and Australia. The strategy has faltered over the past few years as Middle Eastern cities led by Dubai lure business with similar plans. Dubai-owned Emirates, which today announced a partnership with Qantas Airways Ltd. (QAN), has become the world’s largest international airline as it works through orders for 90 A380s, according to Bloomberg report
“Singapore Airlines was one of the major successes and sources of pride in Singapore’s economic development,” said Garry Rodan, a professor specializing in the city-state’s economic history at Murdoch University in Perth, Australia. Emirates now has a similar role as a “state-linked company that’s trying to exploit its particular location” between Asia and Europe, he said.
Emirates, which first flew in 1985, will gain access to more destinations and a bigger Australian sales network through the tie-up with Qantas. The Australian carrier will be able to offer a wider range of one-stop flights to Europe as it shifts its hub for the continent to Dubai from Singapore.
Singapore Air fell as much as 0.4 percent to S$10.47 in Singapore trading and changed hands at S$10.50. The stock has risen 3.4 percent this year, compared with the Straits Times Index’s 13 percent gain.
Competition from Gulf carriers and the Euro-zone debt crisis have caused passenger numbers at Singapore Air’s main unit to drop 10 percent since 2008 to 17 million last year. By contrast, SilkAir’s passengers have jumped 66 percent in the same period to 3 million as growth in China, India and Southeast Asia spurs regional travel.
SilkAir, whose shortest route is a 40-minute hop to Kuala Lumpur, announced its largest aircraft purchase on Aug. 3 with the Boeing deal valued at $4.9 billion at list prices. The unit has 21 planes at present.
http://www.thisdaylive.com/articles/singapore-airlines-last-a380-ends-jumbo-jet-orders/124221/