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Singapore Airlines' Long Haul to Nowhere
Thursday, October 11, 2018 -- A few weeks before Singapore Airlines abandoned Newark-Singapore nonstops in 2013, I sat in a local restaurant with a Singapore Air executive who proceeded to lecture me on the relative unimportance of the U.S. market.
"Our eyes are on London," he said bluntly. "We have opportunity there. The U.S. market isn't as crucial. It's too expensive to operate the A340-500 and no other plane can do the mission."
Dismissive and short-sighted, I noted to myself at the time. Singapore Airlines was essentially bailing on the most lucrative market on the planet. It was ending the world's two longest nonstops--it also operated LAX-Singapore--after nine years of investment. Worst of all, it would force U.S. flyers to connect somewhere else in the world--Tokyo, Frankfurt, Hong Kong, Seoul--before they could reach Changi, indisputably the best airport in the world.
Five years on, it's clear that Singapore Airlines was right about one thing: London-Singapore is an aviation gold mine. Figures compiled by OAG show that Singapore's Heathrow-Changi run generated more than $700 million in revenue between April, 2017, and last March, the fourth most lucrative route in the world.
But now that Singapore Airlines is restarting the Newark and Los Angeles nonstops--the first flight to Newark left Changi today and LAX service resumes next month--the carrier is likely to find that most American business travelers have moved on. If SIA couldn't profitably operate the Newark and LAX nonstops in the nine years after they launched in 2004, chances are even slimmer it can do it today.
Except for AvGeeks, who get off on the fact that Newark-Singapore is once again the longest route in the world, customers haven't exactly beaten down SIA's metaphoric doors to buy seats on the 18+-hour flights. Introductory fares last spring were $1,299 roundtrip in premium economy and around $5,100 in business class. Five months later, prices have barely budged--and actually fallen up front. For an itinerary in February, for example, today I priced business class at just $3,972 roundtrip. Premium economy was pegged at $1,397 roundtrip.
Don't get me wrong. SIA desperately needs the nonstops to connect Changi with the two largest U.S. markets. Even with a San Francisco nonstop, hastily launched to compete with United's 2016 decision to launch an SFO-Changi run, Singapore Airlines has been losing business from the Americas. According to Asian transportation analyst Corrine Png, the Americas account for just 14 percent of Singapore Air's global revenue, down from 20 percent in 2013. And not serving New York and Los Angeles nonstop made it harder than ever for SIA to market itself as a carrier above and apart from other airlines.
Still, the economics just don't seem to work, especially on that Newark flight. Singapore says its new aircraft--long-haul variants of the twin-engine Airbus A350 series--are 30 percent more efficient than the A340-500s, which had four engines and were universally derided as flying gas cans. That may be, but Singapore Air is still taking a stunning weight penalty to make the distance. SIA's standard A350s have 253 seats spread out over business class, premium economy and coach. The specially configured versions that SIA will use for Newark and LAX have just 161 seats in business and premium economy. There's no coach cabin to entice budget travelers and no first class suites to mark up and sell to crazy rich Singaporeans or the money-is-no-object crowds in New York and LA.
The thrill is gone, too, especially for business flyers. Singapore Airlines' Executive Economy class was new and exciting back in 2004--I called it "startling, spectacular and every other good-news adjective in the dictionary"--but it's standard for premium economy today.
Mostly, though, Singapore Air's problem with these new nonstops will be competition: In 2004, especially from the East Coast, Singapore's nonstops were the fastest way to fly to almost anywhere in Asia. They won't be now.
Since Singapore's first attempt to sell Newark-Singapore nonstops, Cathay Pacific of Hong Kong has launched nonstops to New York/Kennedy, Newark, Boston, Chicago and, last month, Washington/Dulles. If you're in Boston, for example, why endure a Logan-Newark flight to connect to SIA's nonstop when you can hop on Cathay in Boston and make a much less painful connection in Hong Kong to Singapore? Ditto for Washington-area flyers. Cathay now dominates most of the East Coast markets that SIA once relied on to feed passengers to its Newark-Singapore flight.
Even beyond Singapore and Changi, a great airport for connections, the business travel imperative for Singapore Air's nonstop seems dubious. I asked both airlines to give me what they consider their five most important connecting markets from New York. Cathay Pacific offered a faster itinerary on seven of them. Using the new nonstop, the only connecting markets where Singapore Airlines shined were Kuala Lumpur, Bali and Jakarta. That makes sense, of course, because Singapore is felicitously located for those three destinations.
Therein lies an additional rub. Unlike 2004, when Singapore was arguably the best place to negotiate onward flights to other destinations, Asian money and Asian markets have shifted northward to China and Korea. Cathay Pacific and Korean Air--now in a joint venture with Delta Air Lines--are geographically better able to bring business travelers where they need to go. For that matter, so are mainland Chinese carriers such as Hainan Airlines.
Which isn't to say Singapore Airlines' nonstops aren't good news for some travelers. If you're tied to the Star Alliance, Singapore's nonstops are a winner. Southern California flyers will welcome the LAX nonstop because United drops its LAX-Changi flights at the end of the month. And then there are folks like JoeSentMe member Steve Cosgrove, a United Airlines 1K traveler who's based in Albany, New York.
He once flew the old Singapore Airlines Newark-Changi nonstop in premium economy and liked it because it "didn't blow a whole week of schedule." When he traveled to Singapore in January, he endured an Albany-Chicago-San Francisco-Changi routing on United.
"Newark is horrible, but I'll drive the three hours down from Albany to catch the Singapore Airlines nonstop," Cosgrove told me. "Besides, when I went in January, my GPU [United Global Premier Upgrade] didn't clear.
But Cosgrove also has a warning for Singapore Airlines.
"I'm not a C-level guy, price matters to me," he explained. "I'll pay 20 percent more for the nonstop. But if they start asking 25, 30, 35 percent more, you start questioning things and a connecting flight becomes appealing again."
This column is Copyright © 2018 by Joe Brancatelli. JoeSentMe.com is Copyright © 2018 by Joe Brancatelli. All rights reserved. All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.