SIA in talks with Airbus, Boeing to develop plane to fly non-stop to US profitably

Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph at the SIA Training Centre in Singapore.
Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph at the SIA Training Centre in Singapore.PHOTO: BLOOMBERG
Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph in a Boeing Co. 777 simulator at the SIA Training Centre in Singapore.
Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph in a Boeing Co. 777 simulator at the SIA Training Centre in Singapore. PHOTO: BLOOMBERG
Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph in a Boeing Co. 777 simulator at the SIA Training Centre in Singapore.
Goh Choon Phong, chief executive officer of Singapore Airlines Ltd., poses for a photograph in a Boeing Co. 777 simulator at the SIA Training Centre in Singapore.PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - Singapore Airlines is in talks with Airbus Group and Boeing Co. on developing a plane with new technology that would allow it to fly nonstop to the U.S. profitably, its chief executive officer Goh Choon Phong said.

In 2013, the flagship carrier stopped the 19-hour trip from Singapore to New York, adding about five more hours to travel between the cities.

"We, of course, want it as soon as possible," Mr Goh said in an interview with Bloomberg Television's Haslinda Amin. "There isn't really a commercially viable aircraft that could fly nonstop."

Reviving nonstop flights to the U.S. will help the carrier fill a gap in its network that's benefiting Asia-Pacific rivals Cathay Pacific Airways and Qantas Airways. The all- business-class daily flights from Singapore to Los Angeles and Newark, New Jersey, ended as the routes were not profitable with aircraft that flew with four engines, analysts said.

"It's really a question of economics," said Richard Aboulafia, an analyst at US-based aerospace consultant Teal Group. "The last generation of very long-range jets, particularly the A340-500, was simply not efficient, which is what killed Singapore's Newark service."

SIA stopped the service using a four-engine, 100-seat Airbus A340-500 in November 2013 after ending flights to Los Angeles from the city-state a month earlier. Using an aircraft with two engines would be more economical than one with four because it's designed for efficient long-range flights, Aboulafia said.

SIA shares gained 0.7 per cent to $10.63 as of 11 a.m. on Thursday.

The Newark service was about 16,700 kilometers long, while the Los Angeles flight was more than 14,000 kilometers.

Airbus and Boeing both offer planes with twin engines. Airbus's A350, which entered commercial service in January with Qatar Airways, can travel up to 8,200 nautical miles (15,100 kilometers) non stop.

Boeing's 777-200LRs can fly 8,625 nautical miles. The 777X, an upgraded model that the U.S. company is pushing to be the No. 1 choice among large wide-body jetliners, will be designed to fly more than 9,300 nautical miles, according to its website. The 777X isn't in operation yet.

Qantas's flight from Sydney to Dallas Fort Worth, a journey of about 13,800 kilometers, using an Airbus A380 superjumbo, is the current longest nonstop commercial route by distance. Qantas replaced the Boeing 747 jumbo for that route starting September 2014.

The Singapore carrier currently flies to four U.S. cities - - Los Angeles and San Francisco via Hong Kong, Seoul and Tokyo; and New York via Frankfurt and Houston with a stop in Moscow. Singapore Air flies A380s and Boeing 777s to the U.S.

Cathay has services to five U.S. cities, including direct flights to San Francisco.

MR Goh didn't identify the U.S. cities for direct flights by SIA in future.

"There is lack of viable intermediate points," Mr Goh said. "That's largely because the countries concerned are not really giving us the rights to operate what we call the fifth freedom from those points to the U.S."

The fifth freedom right in aviation allows an airline to fly between two foreign countries on a flight originating from or ending in its own country.

SIA is looking for ways to address these issues. One of them is increasing its partnership with other airlines, including Air New Zealand and Virgin Australia Holdings, to offer more destinations.

The airline also plans to develop hubs outside Singapore to give it a broader network connectivity. It has a carrier with Tata Sons Ltd. in India and a budget venture in Thailand.

"We're among the earlier adopters of new technology," Goh said. "That certainly puts us in a very good position to compete and also to take advantage of those technology to serve new points."