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Serious Familee to sell away Singapore airlines soon?

virus

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http://www.channelnewsasia.com/news...ngapore-still-need-a-national-airline-8970666

Commentary: Does Singapore still need a national airline?

It recently rose in Skytrax rankings to be named second best airline in the world, but Singapore Airlines' performance in the last quarter has sparked a debate on whether the airline is sufficiently innovative.

SINGAPORE: For the first quarter of 2017, the Singapore Airlines (SIA) Group reported a loss of S$138.3 million. This performance stands in stark contrast to its performance in the financial year from 2015 to 2016, where the SIA Group reported a net profit of S$804 million, and the same quarter in 2016 where the SIA Group reported a net profit of S$225 million.

Admittedly, SIA’s earlier strong performance was largely due to lower net fuel costs, which declined by S$973 million over the previous year. Lower fuel costs were large enough to offset lower passenger flown revenue, and higher staff and aircraft maintenance costs. In addition, the SIA Group's profits were bolstered by strong results from Scoot’s first year of operations and Tiger Airways' performance.

Some people have asked in light of SIA’s recent woes whether a national airline is still a relevant strategy for Singapore today. SIA, together with Cathay Pacific, are the only two airlines in the Asia Pacific that do not have a market of domestic flights to rely on.

My view is that we should cast our eye instead on how much SIA has achieved in restructuring, in order to tackle new markets and compete with other entrants, and assess if these steps have enabled SIA to better position itself to catch headwinds in an evolving global economy.

COMPETITION FROM THE GULF AIRLINES

Traditionally strong in first- and business-class travel, SIA has been challenged by the rise of North Asian carriers as well as the Gulf carriers, namely, Emirates, Qatar and Etihad, known as the ME3.

These ME3 carriers have been strongly financed by their respective countries and using SIA’s own strategy, focused on providing new aircraft with superb in-flight entertainment and attention to customer care to grab market share in this lucrative sector. With their long-range aircraft, ME3 carriers are bypassing Singapore’s air hub to transport passengers from Europe and the Middle East through their own air hubs onto other destinations in the Asia Pacific.

In response, SIA has ordered 67 Airbus 350s that are 25 per cent more fuel-efficient to increase their own long-range flights from Singapore to Europe and the US. The cabins of these A350s are also equipped to provide the most comfortable and up-to-date in-flight experience for this premium class of travel, but more importantly, these direct flights save time for business travellers because they do not need a stopover.

These A350s save tremendous operational costs for SIA, eliminating the need for an intermediate stop. Direct flights to the US save SIA an average of more than 30 per cent of operational costs compared to those with stopovers.

FOCUS ON BUDGET CARRIERS

In response to the growing competition of budget carriers in the region, SIA has also focused more attention on its own budget carriers, Scoot and Tiger Airways, even merging both airlines to reap potential economies of scale and consolidate its foothold in the budget market. The SIA Group recognises that this is a growing market that is likely to outgrow the premium market where SIA’s growth has remained stagnant or declined over the last few years.

Looking ahead, SIA has to connect with a whole new generation of younger travellers who have grown up with budget carriers, which entails a reconfiguration of its own business model. The new SIA business model has to accommodate SIA’s premium brand as well as the budget brands of Scoot and Tiger Airways for different range of ticket pricing. However, better coordination and networking among the different carrier brands would enable the SIA group to deliver more competitive pricing and connectivity for its passengers.

NETWORKING AND RESTRUCTURING FOR CONNECTIVITY

In its quest to be adaptable to changing business conditions, SIA is developing its networks and enhancing connectivity by working with various Star Alliance partner airlines on several fronts. Partnerships include joint ventures, code-sharing and even revenue sharing arrangements to reduce costs and ensure continued earnings.

SIA and Ethiopian Airlines recently expanded their code-share agreement to offer passengers seamless connectivity between various destinations across Asia and Africa. SIA also has a wide ranging partnership with Lufthansa to jointly operate major routes between Singapore and Europe.

The move to integrate SIA Cargo into the SIA group by first half 2018, will help SIA Group take better advantage of passenger aircraft bellyhold space. This enables the cargo division to have more capacity, connectivity and better coordination for cargo space utilisation and delivery. SIA Cargo has also right-sized its fleet downwards to seven 747-400Fs since 2001, a cost-cutting measure that has helped to deal with spare capacity.

In addition, the reintegration of SIA Cargo into the SIA Group would improve efficiency and offer greater flexibility for staff deployment because it would maximize synergies across the grouping. This would position Singapore well as an aviation and cargo logistics hub to take advantage of greater regional economic integration through the ASEAN Economic Community, which is the third largest growth region in Asia, after China and India.

NEW TRANSFORMATION OFFICE TO SUSTAIN CHANGE

Most importantly, SIA has established a transformation office in May 2017 to conduct a wide-ranging review of its entire business strategy and operations. In time, the office will help better position the SIA group for long-term sustainable growth.

A key part of this transformation will be the need to retrain, reskill and redeploy its human capital across its portfolio companies to cater to the changing needs and emerging consumer demands of a new generation of businesses and travellers as well as to mitigate and curtail job losses.

If the various measures mentioned are successfully implemented, SIA is likely to be in a better position to meet various challenges. While meeting bottom lines for SIA is important, and its companies need to be profit generating and have sustainable business models, SIA is also an important pillar supporting Singapore’s ambition to be an aviation hub that would provide a whole slew of services and jobs for the future.

The International Air Transport Association has released a study that projects that aviation-related jobs will double in Singapore from 320,000 in 2014 to 700,000 by 2035. The aviation sector's contribution to Singapore's gross domestic product will also more than double from S$42 billion in 2014 to S$88 billion in 2035

What lies beyond being an air hub? In 2016, about 35 per cent of the value of global trade was transported by aircraft. Cities like Singapore that are close to airports provide companies faster access to suppliers and customers and will be transformed into future “aerotropolis”, according to aviation and urban planning experts John Kasarda and Greg Lindsay. These aerotropolis are designed and custom built for the “economy of speed” in which a premium is placed on transporting valuable goods and human capital efficiently and seamlessly.

SIA has fired a few salvos to transform its business model. We need to give it time for the transformation to come to fruition before judging if Singapore still needs SIA. For the time being, the answer is yes because SIA has moved fast to respond to new challenges. Time will tell if these steps are enough.

Dr Faizal Yahya is a senior research fellow at the Institute of Policy Studies at the Lee Kuan Yew School of Public Policy in the National University of Singapore.
Source: CNA/sl
Read more at http://www.channelnewsasia.com/news...ngapore-still-need-a-national-airline-8970666
 

eatshitndie

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qatar airways attempt to muscle in on american airlines the last couple of days with a 10% stake. this after airspace is blocked by the saudi coalition. sia can do the same if it has solid sovereign wealth fund backing. and turn fat ah soh united and american airlines thin and young again.
 

virus

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will aunty airline allow them to change it into personal ambulance with stretcher and jacuzzi?
 

JHolmesJr

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no need to sell…just be less kuai lan…get off the high horse and down to earth….world does not revolve around u, changi and singapore.
 

virus

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wah TS that is one fucking big allegation you are making.

dont be cock... if MSM publish an opinion article from braddel brothel chances are the plans may be steps ahead. wonder if they got secret committee on this also.
 

syed putra

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qatar airways attempt to muscle in on american airlines the last couple of days with a 10% stake. this after airspace is blocked by the saudi coalition. sia can do the same if it has solid sovereign wealth fund backing. and turn fat ah soh united and american airlines thin and young again.

SIA bought 49% of virgin atlantic and it was disastrous. Instead of learning a lesson from this, they went on and bought minority stake in virgin australia. Sometimes it seems, people never learn.
 

frenchbriefs

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SIA bought 49% of virgin atpantic and it was disastrous. Instead of learning a lesson from this, they went on and bought minority stake in virgin australia. Sometimes it seems, people never learn.

They did?I thought Richard Branson did not want to sell virgin to SIA.
 

borom

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When an academic with not a single day experience in business or private sector talks about business issues, I wonder what use or purpose does it serve.
Dr Faizal served in the MEWR and MFA and list his research interests as human capital; social capital; multicultural and societal issues; globalisation; regional synergies across Asia.
I do not see anything on business, transportation, airlines ect2 that makes him qualified to give advice on SIA.
Is this what taxpayers monies are used for-for opinions like this?
Any difference from military personnel parachuted into high appointments in GLC's?
 

eatshitndie

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SIA bought 49% of virgin atlantic and it was disastrous. Instead of learning a lesson from this, they went on and bought minority stake in virgin australia. Sometimes it seems, people never learn.

virgin airways was already in trouble and decided to sell stakes in its various components. virgin america was sold to alaska air group. sia should have bought majority stake in virgin atlantic and turned it into just-broken-in virgin joyways to attract horny male passengers and yank them from loyalty to their frequent flyer miles program. and replace the unionized over the hill attendants with sweet young things donning bikinis. sex will triumph over loyalty to frequent flyer programs and their diminishing perks. sia needs to sex up. sarong kebaya is getting stale. must show more skin.

IMG_4831.JPG
 

sfugel

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Sell?......SIA aid the government's cash cow. Look at it's dividend payout for the last 10 years.
 

scroobal

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Every SIA CEO was a risk taker except the present one. They occasionally made mistakes like virgin Atlantic, failing to enter the Oz domestic market after the failure of Ansett and the offer of attractive terms from airport authorities. But the wins when it came were big. They had to enter new markets, show the share of the pie, plus a series of strict KPIs. They also had a religious zeal when it came to standards and branding.

Cost cutting is for the cautious lot or in a market turndown and more importantly have run out of ideas. Going for a new fleet to save on fuel cost came straight from Pillay's playbook.
 

virus

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SIA bought 49% of virgin atlantic and it was disastrous. Instead of learning a lesson from this, they went on and bought minority stake in virgin australia. Sometimes it seems, people never learn.

u r wrong, the disaster was buying ansett airlines which went bust.

li ka shing would hv gone to NZ to turn it round and into a profit with his own helmsmen

whorejinx was obviously clueless
 

virus

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virgin airways was already in trouble and decided to sell stakes in its various components. virgin america was sold to alaska air group. sia should have bought majority stake in virgin atlantic and turned it into just-broken-in virgin joyways to attract horny male passengers and yank them from loyalty to their frequent flyer miles program. and replace the unionized over the hill attendants with sweet young things donning bikinis. sex will triumph over loyalty to frequent flyer programs and their diminishing perks. sia needs to sex up. sarong kebaya is getting stale. must show more skin.

View attachment 30905

if tix is t S$6.9 i would have booked every flight available
 
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