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SIA delays roll-out of premium economy on A380 fleet

Target to retrofit 19 of the planes by first quarter 2016 will be pushed to the second quarter

Delays in its seat installation programme will postpone the roll-out of premium economy on its Airbus A380 fleet for certain routes, Singapore Airlines (SIA) said.


DELAYS in its seat installation programme will postpone the roll-out of premium economy on its Airbus A380 fleet for certain routes, Singapore Airlines (SIA) said.

The airline was expected to have 19 of its A380s fitted out with premium economy seats by the first quarter of next year, but this will now be pushed to the second quarter. It presently has three A380s which have been retrofitted with the new product in service, as opposed to the seven planes it initially planned for.

Currently, plans to retrofitits 19 Boeing 777-300ER aircraft is on schedule, with two aircraft kitted out with the new product so far.

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"Singapore Airlines is working to complete the installation programme as quickly as possible," said SIA in a statement on its website on Thursday, as it apologised for the inconvenience caused. "Customers with ticketed bookings who are affected by the delays will be contacted progressively by Singapore Airlines or travel agents to offer alternative travel arrangements."

Routes that will be affected by the delays in A380 retrofitting include New York, Zurich, Paris, Shanghai, Beijing, Tokyo and Mumbai. The full list is available on SIA's website.

Passengers unable to switch to a different flight with premium economy seats will be offered inflight gift vouchers of S$150-250 per sector as well as an upgrade to premium economy for a future flight. Those who decide to cancel their flight will be given a full refund as well as a free upgrade to premium economy for future use.

Brendan Sobie, analyst at CAPA - Centre for Aviation, doesn't expect "meaningful impact" on the group's bottom line from the delays, given that premium economy is a long-term strategy which will take time to bed down.

"A delay in a few months with some aircraft doesn't really change anything significantly," said Mr Sobie, adding that retrofit delays are not uncommon. "I guess it is a bit of a setback from a marketing and customer standpoint as passengers were expecting the premium economy option on A380 routes earlier and in some cases, had already made bookings."

SIA only introduced premium economy on its Sydney route last month, and has since also started offering it for its Hong Kong and London routes, using three retrofitted A380s and two 777s.

At higher fares vis-a-vis economy, premium economy typically commands fatter yields and throws in perks such as a more spacious seat, a higher baggage allowance, additional KrisFlyer miles and wider meal choices. It also means a slight capacity reduction in the economy cabin as some economy seats give way to make room for premium economy seats.

In re-introducing the product - it initially offered premium economy on its now-defunct direct service to New York - SIA joins a long list of carriers which already have the product, such as Cathay Pacific and Qantas.

This comes at a point where profits are being squeezed as rival carriers - especially the Gulf airlines - pump capacity into the South-east Asian market at extremely competitive fares.

SIA is investing about US$80 million on its premium economy seats which will be rolled out on 19 Airbus A380s, 19 Boeing 777-300ERs and the first 20 of SIA's upcoming A350 aircraft.

The counter closed at S$9.91 on Thursday, up nine cents.