Singapore Airlines and Changi fall on hard times

Centre For Asia Pacific Aviation

Singapore Airlines (SIA) has announced further network cuts amid softening demand for travel across its network until the end of Mar-09, with the exception of the Middle East, where it is adding capacity to Abu Dhabi, Kuwait, Cairo and Dubai.

SIA is reducing capacity to India and Europe and is cutting frequency on the all-Business Class Los Angeles and Newark non-stop routes from daily to five times weekly on each route.

According to SIA, the Tuesday and Wednesday services, where demand is lowest, will be suspended – with some media reports this week suggesting load factors in the 30s on some flights.

An airline spokesman stated, “we don’t want to be flying half-empty planes around the world any longer than we have to, because it increases our cost burden at a time when we can least afford that”.

Further capacity cuts have not been ruled out by SIA.

Changi in the doldrums

The cuts come as the Civil Aviation Authority of Singapore (CAAS) released figures showing passenger numbers at Changi Airport fell in three of the last four months of 2008, taking the full year tally to 37.7 million, up 2.7%. Air freight volumes continued to plummet as the global economic slowdown accelerated late in the year, with volumes down 21.4% in Dec-08.

Air freight volumes at Changi have now declined in each of the past two years, and a third consecutive annual fall is likely in 2009 as the global economy weakens.

CAAS’ Director General and CEO, Lim Kim Choon, stated, 2009 will be a “challenging year” and the body recognises the “tough operating environment that airlines and airport partners are operating in”.

He added, CAAS is committed to help its partners at Changi “ride out the downturn, through means such as the extension of the Air Hub Development Fund 1”.


Singapore Air meets agents to break deadlock
The Economic Times

Singapore could lose its numerous high-spending Indian travellers, thanks to the zero-commission stance of its national carrier, Singapore Airlines (SQ).

While six tour and travel agents’ associations have already stopped issuing SQ tickets since December 28, indications are they could boycott Singapore as a destination unless the airline reinstates the 5% agency commission.

The tour and travel agents’ associations are planning to replicate Gandhiji’s Quit India movement. Their target being all foreign airlines, particularly SQ. The movement is slated to start on his death anniversary, January 30, unless the agency commission is reinstated. Their slogan is ‘respect the Indian agent or Quit India’.

Officials of these associations will meet Singapore Tourism Board executives on January 29 in Mumbai to push for their demand. If the two sides do not hammer out a deal, these associations could boycott tour packages to Singapore.


S’pore airport’s passenger growth slows

Passenger traffic at Singapore’s Changi Airport grew 2.7 percent last year, its slowest growth in five years as the economic slowdown begins to hurt travel and aviation, the Straits Times reported on Thursday.

Changi Airport, one of Asia’s busiest aviation hubs, handled 37.7 million passengers in 2008 with traffic from Indonesia, Malaysia, the Philippines and Vietnam growing while traffic from Thailand and China fell. Passenger traffic grew 23.1 percent in 2004.

Air freight movement also slipped 2 percent to 1.86 million tonnes last year.

“We acknowledge that 2009 will be a challenging year and recognise the tough operating environment that airlines and airport partners are operating in,” Lim Kim Choon, chief executive of the Civil Aviation Authority of Singapore, which owns Changi Airport, said in a statement late on Wednesday.

Singapore’s transport minister said last year Changi Airport will be split into two entities, one of which will be an airport company placed under state investor Temasek Holdings. Changi Airport is Singapore’s main airport and its overseas arm owns a stake in China’s Nanjing Lukou International Airport and provides management and consultancy services in several countries including Russia, China and India.

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