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Singapore Airlines (SIA) has unveiled a bold new strategy to launch a new long-haul low-cost carrier which should allow the group to better compete against faster-growing rivals and regain some of the market share it has lost to budget airlines.
The SIA Group on 25-May-2011 announced it will establish a new wholly owned low-fare airline subsidiary. The carrier will launch services within one year and operate widebody aircraft on medium and long-haul routes. Details of the model, fleet and network are to be revealed over the next several months. CAPA expects SIA will borrow several elements of the long-haul low-cost model pioneered by Qantas subsidiary Jetstar, which includes business class seating and connections with its mainline sister carrier. Neighbouring long-haul LCC AirAsia X, has also evolved to including a number of lie-flat seats and much of its success depends on its ability de facto to interline with shorthaul AirAsia.
SIA is likely to use the new airline for a combination of adding capacity on existing routes and launching new routes which have a high mix of leisure travellers, with an emphasis on new destinations in India and China. The new airline will also be able to take over some or all flights on lower yielding routes routes with a low portion of business travellers, including some destinations in Australia and New Zealand – markets which contribute a large proportion of SIA’s revenues. It will almost certainly also follow the Qantas/Jetstar approach of linking networks to gain maximum expansion.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
