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SIA expects shaky global economy to affect premium demand

Plan to tweak configuration of 5 incoming A380s next year by having fewer suites to better match demand
Friday, March 4, 2016 - 05:50

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The A350's premium economy class cabin, equipped with SIA's new cabin products, including a companion app for its KrisFlyer in-flight entertainment (IFE) system.

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(Above) SIA's first A350 arriving yesterday at Changi.

Singapore

DEMAND for Singapore Airlines' (SIA) premium seats is holding up but could take a hit in the future given headwinds in the global economy.

"With the kind of outlook we're seeing in the world economy, we do expect that will affect business demand at some point. That's something we'll watch for," said SIA chief executive Goh Choon Phong, speaking to media on Thursday on the sidelines of the arrival ceremony for its first Airbus A350-900.

"At this point in time, we are not really seeing weaker demand for Business Class," he highlighted.

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Premium traffic is important for SIA as the airline typically gets a substantial proportion of revenue from the front end of the cabin.

Meanwhile, the airline plans to tweak the configuration of five of its incoming A380s next year by reducing the number of suites to better match demand, Mr Goh said. Its existing double-decker jets have 12 suites each.

SIA's 253-seater A350 landed smoothly at Changi Airport at 10am on Thursday, where it was greeted by a traditional water cannon salute following a 12-hour flight from Airbus's delivery centre in Toulouse, France. About 70 passengers were on board the non-commercial delivery flight SIA8895 back to Singapore, including Mr Goh, SIA and Airbus staff, and members of the media.

Dubbed a game-changer for the group, the new aircraft will enable SIA to grow its long-haul network with direct points after little expansion in recent years, as it seeks to attract premium passengers and fend off competition from the cash-rich Gulf carriers. Stiff competition from full-service and budget carriers alike is putting pressure on yields and contributing to a challenging operating environment.

Minister for Transport Khaw Boon Wan was the guest-of-honour at the arrival ceremony, which took place immediately after touchdown. Also present to welcome the flight was Airbus chief executive Fabrice Brégier as well as SIA chairman Stephen Lee.

Noting that SIA has banked on the success of the A350 by ordering 67 of the aircraft, Mr Brégier added: "Who can be a (better) ambassador than SIA?"

The plane will be deployed on the Kuala Lumpur and Jakarta routes for crew training until May 9, when it will be operated to Amsterdam. SIA has earmarked Dusseldorf as its second destination for the A350, starting July. The airline will take delivery of a total of 11 A350s this year, with more routes to be announced in due course. Other carriers currently using the A350 include launch customer Qatar Airways, which operates it between Singapore and Doha.

The A350 is equipped with SIA's new cabin products, including a companion app for its KrisFlyer in-flight entertainment (IFE) system which allows passengers to link up their personal tablets to the IFE. This means passengers can now use their tablets (and, from the second quarter of the year, their cellphones) to review content on the ground as well as use their personal device as a remote control in-flight. This will be progressively rolled out to SIA's Boeing 777-300ERs.

SIA has 66 more A350-900s to come, making it the biggest customer for the -900 variant. Among those 66 are seven of the ultra-long-range (ULR) A350s, for which SIA will be the launch customer in 2018.

SIA plans to use the A350 ULRs to restart direct flights to New York and Los Angeles as well as to one more as-yet-unnamed US city.

Powered by Rolls-Royce Trent XWB engines, the A350 is touted as 25 per cent more fuel-efficient than previous-generation aircraft, thanks to its aerodynamic design as well as its carbon fibre fuselage and wings.

Cost efficiencies aside, the aircraft is built to deliver a more comfortable passenger experience with a wider cabin, taller ceiling and quietness almost akin to the A380.

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