Singapore Airlines finds premium economy a tougher sell on new non-stop US flights

A Singapore Airlines Airbus A350-900ULR prepares for take-off. (Reuters)
Updated 15 November 2018
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Singapore Airlines finds premium economy a tougher sell on new non-stop US flights

  • The carrier last month resumed after five years the world’s longest commercial flight
  • It represents a major expansion in the US market for Singapore Airlines

SINGAPORE: Singapore Airlines is facing no problem selling business-class tickets on its ultra-long non-stop flights to the United States but is having to price premium economy seats very attractively, a senior executive said on Wednesday.
The carrier last month resumed after five years the world’s longest commercial flight, an almost 19-hour non-stop journey from Singapore to New York.
The airline ordered seven new ultra-long-range twin-engine Airbus SE A350-900ULRs fitted with just 67 business class and 94 premium economy seats for those flights and for non-stop services to Los Angeles and San Francisco. These flights have no economy class seats.
It represents a major expansion in the US market for Singapore Airlines and a test of whether the carrier can charge the 20 percent price premium that travel industry data shows is typical for ultra-long non-stop services due to their popularity with time-sensitive business travelers.
Singapore Airlines Executive Vice President Commercial Mak Swee Wah said there was existing demand for business class which he expected would continue to pick up.
For premium economy, however, he said some markets were not “entirely familiar” with the product, which offers more leg room and other amenities than economy class.
“I think we need to continue to stimulate and encourage the market to consider this product, initially with very attractive pricing, but eventually I think people will see that even at prices which we offer it is a good product to purchase because it is a very long flight,” he said at an analyst and media briefing.
His comments came after Singapore Airlines reported on Tuesday an 81 percent plunge in second-quarter net profit, hurt by higher fuel prices, lower airfares and non-cash losses at its part-owned Virgin Australia Holdings Ltd.
Yields, a proxy for ticket prices, fell 2.2 percent in the second quarter compared with a year earlier, failing to help offset the impact of a 24 percent rise in fuel prices.
Singapore Airlines is offering premium economy fares as low as S$1,698 ($1,230.17) return from Singapore to New York for weekday travel over part of the peak Christmas travel period, according to its website.
That is in line with economy class fares from premium rivals like Hong Kong’s Cathay Pacific Airways Ltd. and Dubai-based Emirates that require a stop and a longer travel time, according to a Reuters search on Expedia.
When it previously flew to New York and Los Angeles non-stop on four-engined A340-500 jets that used more fuel, it had initially offered both “executive economy” and business class but later switched to all business class. Those flights were abandoned in 2013 when high fuel prices made them uneconomic.
A Singapore Airlines spokesman said on Thursday that the airline constantly reviewed its cabin configurations.
“However, at this point we are confident we have the right balance with business class and premium economy class seating on our A350-900ULRs, and there are no plans to change it,” he said.


Mideast plays key role in Chinese export of armed drones, report says

Updated 17 December 2018
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Mideast plays key role in Chinese export of armed drones, report says

  • China has exploited America’s selective drone export policy to become an increasingly influential player in meeting demand
  • The report is entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region”

BEIRUT: The use of armed drones in the Middle East, driven largely by sales from China, has grown significantly in the past few years with an increasing number of countries and other parties using them in regional conflicts to lethal effects, a new report said Monday.
The report by the Royal United Services Institute, or RUSI, found that more and more Mideast countries have acquired armed drones, either by importing them, such as Jordan, Iraq, Saudi Arabia and the United Arab Emirates, or by building them domestically like Israel, Iran and Turkey.
China has won sales in the Middle East and elsewhere by offering drones — otherwise known as UAVs or unmanned aerial vehicles — at lower prices and without the political conditions attached by the United States.
The report , entitled “Armed Drones in the Middle East: Proliferation and Norms in the Region,” said that by capitalizing on the gap in the market over the past few years, Beijing has supplied armed drones to several countries that are not authorized to purchase them from the US, and at a dramatically cheaper price.
“China, a no-questions-asked exporter of drones, has played and is likely to continue playing a key role as a supplier of armed UAVs to the Middle East,” it said.
The report explored where and how each of the states have used their armed drones and whether they have changed the way these countries approach air power. It found that Iran, the UAE and Turkey all changed the way they employ airpower after they acquired armed drones.
For Turkey and the UAE, armed drones enabled them to conduct strikes in situations where they would not have risked using conventional aircraft, it said. Iran developed armed drones from the outset specifically to enable to project power beyond the reach of its air force, which is hamstrung by obsolete aircraft and sanctions, the report added.
The report said it remains to be seen whether and how the loosening of restrictions on the exportation of armed drones by the Trump administration will alter dynamics in the region.
“Nonetheless, proliferation in armed UAVs in the Middle East is unlikely to stop and could, in fact, even accelerate,” the report said.