News analysis

SIA's game plan gains momentum

Moves to launch products and upgrade offerings key to staying ahead of competition

Singapore Airlines is not sitting still. It has just finished unveiling its new ultra-first class suites and other cabin products for the Airbus 380s, and already the airline is thinking of the next big launch.

This time, the focus is on SIA's Airbus 350-900s and Boeing 787-10 planes that will operate medium-haul routes.

All will be revealed in the coming months, a visibly excited chief executive officer Goh Choon Phong told journalists after his half-year financial results briefing yesterday.

Mr Goh promised that the new product will be a "significant upgrade" from what is currently offered on SIA's A-330s.

"We think it's a very good product (especially in business class) so watch this space," he added, without divulging more.

Like the improvements being planned for the A-380 fleet, it has also been about a decade since SIA last refurbished its cabins on aircraft used for mid-haul services, which typically come in a two-class configuration - business and economy.

SIA seems to be doing a lot these days.


SIA's new suites in the A380 have features like separate sitting and sleeping areas and a wireless tablet that acts like a personal butler. ST PHOTO: LIM YAOHUI

Apart from the almost back-to-back product upgrades, the airline announced in May that it would set up a Transformation Office - to return to the drawing board to reassess all processes, systems and operations across the entire group.

This was after it reported a surprise $138 million net loss in the fourth quarter ended March - its first red quarter in five years.

The airline has embarked on a three-year turnaround plan and while Mr Goh insists the aim is not to cut costs, integration and streamlining will invariably lead to savings.

It's still early days but some benefits are already starting to flow through, he said.

For example, a new approval process has helped to shorten decision-making time so SIA remains "effective and prompt", Mr Goh said.

Other recent initiatives include a new Customer Experience Management (CEM) system, launched in 2014. The aim is to progressively build up a customer database of travel history and preferences so that staff can quickly identify the needs of the customer.

This will allow SIA to offer a more personalised service on the ground and in the air.

In 2013, the airline announced a $100 million investment to upgrade its airport lounges around the world.

In the meantime, aircraft acquisition continues to take advantage of new technology and systems that allow SIA to operate more efficiently. This, in turn, helps the airline serve markets and operate routes which may not have been viable before.

By March, the SIA group, comprising the premium parent airline, regional arm SilkAir, budget offshoot Scoot and SIA Cargo, will have almost 190 aircraft.

Vistara, an Indian carrier which SIA owns 49 per cent of, will also mark a significant milestone in the second half of next year when it launches its first international flight.

It's obvious that SIA's game plan to stay ahead in the aviation race has gained momentum in the last few years. And for good reasons: The competition is not sitting still.

Even as SIA's new A-380s will feature suites that are 60 per cent larger than what they replace and couples in business class can transform their two seats into a double bed, rival Etihad Airways has a three-room "The Residence" suite and a single-room "The Apartment" suite.

Each comes with an onboard shower and spa.

Qatar Airways offers adjustable panels and movable TV monitors that allow up to four people to transform their space into a private suite, so they can work, dine and socialise together.

The Doha-based airline also announced on Monday plans to take a 9.6 per cent in Hong Kong's Cathay Pacific, giving the Middle Eastern airline a foot in the growing Chinese market - something that SIA has not been able to do despite earlier attempts.

While yields continue to be under pressure, the books are looking better for SIA.

Yesterday, the airline reported that net profit for the six months to Sept 30, surged about 32 per cent year-on-year to $425 million on the back of higher operating profit and lower share of losses from associated companies. Revenue edged up 5.5 per cent to $7.71 billion with improvements across all business segments.

In an industry as dynamic as the air travel business, though, things can change very quickly so it's incumbent upon SIA's top brass to ensure that they do not lose the momentum.

A version of this article appeared in the print edition of The Straits Times on November 09, 2017, with the headline 'SIA's game plan gains momentum'. Print Edition | Subscribe