Speedy recovery, good take-up across classes: Executive vice president-commercial, Singapore Airlines
As global airlines go through a post-pandemic recovery phase, the growth in uptake of premium cabins has been witnessed by carriers across the board. Notably, however, a good part of this growth has come from non-corporate travellers. Singapore Airlines (SIA), which is also reporting this growth, has adjusted its fare products to tap into this new segment of travellers, while also adding more flights to offer a higher number of business class seats on some routes, Lee Lik Hsin, the airline’s executive vice president-commercial, told reporters. Speaking on the sidelines of the reopening of SIA’s premium lounges at Changi Airport at an investment of SGD 50 million, Hsin also commented on the recovery in the Indian market, and the impact from China and Russia. Pranav Mukul reports. Edited excerpts:
In the aftermath of the pandemic, how much more important has a business class passenger become from a revenue perspective?
Every customer is important. But on whether there is a fundamental shift in the proportion, I think it’s still early days. We are seeing good take-up in all of our classes in this very speedy phase of recovery that we’re seeing. In the longer run, we will observe what happens and adapt accordingly.
Are you seeing the trend of having more leisure travellers in the premium cabins than business?
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I think that definitely in the early phases of recovery through late last year all the way through this year, we were seeing lot of take-up in the upper cabins — the business and first class cabin — from non-corporate. Some in the industry have called it revenge travel. Of course some of it is for leisure, some of it is for visiting friends and relatives but we are definitely are very pleased with that. We have tried to tailor our product in terms of our fare conditions to tap on this market.
Now that you’ve revamped your lounges on the ground, are there plans to introduce new products or refurbish business class products on your aircraft?
Actually, as a big part of Covid, we had fleet restructuring plans that brought our business class products in the air to a whole new level. We retired many of our older planes — Airbus A330s and Boeing 777s — and so in the years leading up to Covid, we had already been introducing brand new business class products, in particular on our 787-10s and our A350s medium haul aircraft. We will bring in new cabin products on the Boeing 777-9 but that aircraft is not yet coming in to service in the next year or two. We have to wait to see what happens to Boeing.
Given that business class is growing, is there a chance of adding more seats that it takes up in an aircraft?
Aircraft seat changes are very complex and it takes a long time to plan…I think the way we have managed that is that we’ve added more flights. By adding more flights, we are putting more business class seats overall on the route. One very good example is New York, where we now have three flights a day. Pre-Covid, we only had two flights a day.
In business travel, how much are you affected by the Chinese market not coming back and by the Russian market’s collapse?
We don’t have significant operations to Russia, even pre-Covid. So right now, we have cancelled those flights but it doesn’t have that big an impact. For China, it is a meaningful percentage of our network but the growth that has happened in the last year has been possible without China. We don’t know when it’s going to open but we do have room to grow between now and the point China opens. Also, even if we reach the level where China is still not open, some markets are demonstrating strengths even more than pre-Covid, and that would make up for whatever shortfall from China if it doesn’t opens.
Which markets are these?
We are having very good growth to the US, Europe. We are seeing good load factors there.
How good is the recovery in the Indian market?
The Indian market is recovering very strongly as well. We are experiencing very good load factors on all of our India flights, and hopefully we will also be able to announce an increase in the number of our flights over the next two schedules.
There is also the issue of rising fuel prices. Could you also see an increase in fares going ahead?
The rising fuel cost is a concern for any airline. We have to watch that space very carefully. Fares are a function of demand and supply. Airlines will not be able to raise fares even if fuel prices go up, if the underlying demand is not there. I think in recent times, because of the pent-up demand, across the globe, there have been media reports about high fares. But if you look further up, the fares do come back down to more affordable levels. So, the message that I would have is book early.
(The correspondent is in Singapore at the invite of Singapore Airlines)