Singapore Air Show

SIA serves as standard bearer for Airbus’ A380 megaliner

 - February 18, 2008, 10:56 PM

Many Singapore Air Show visitors are seeing the Airbus A380 paying for itself in commercial service for the first time as it lands and takes off here at Changi Airport. For at least another six months, Singapore will remain the only operating base for the world’s largest airliner and local carrier Singapore Airlines (SIA) its only operator. While Dubai’s Emirates Airline is still the largest A380 customer, twice-a-day flights by SIA illustrate vividly how the global economic center of gravity has moved east to the Asia Pacific region.

For instance, so strong is demand for SIA connections with Australia that in April–just six months after the Rolls-Royce Trent 900-powered A380 replaced one of three daily Boeing 747-400 flights to Sydney–the airline will add a Boeing 777-300ER. By June, SIA plans to host four flights every day on the route, providing accommodation for 10,500 passengers each week to and from Sydney, in addition to the capacity aboard its 66 weekly Australian flights to Adelaide, Brisbane, Melbourne and Perth.

SIA introduced its 777-300ERs just over 12 months ago on routes to Frankfurt, Hong Kong, Milan, Paris, San Francisco (via Seoul) and Zurich. It will be the world’s largest operator of this variant of the big twinjet when its 77th is delivered. The model could be complemented by long-range 777-200LRs for service to U.S. points such as Los Angeles and New York, currently served by four-engine Airbus A340-500s marked for retirement.

On February 1, SIA announced an operating profit of S$675 million ($519 million) for the third quarter of the 2007-08 financial year–a 50.7-percent increase on the result achieved in the same period in 2006-07. This was on third-quarter revenues of S$4.3 billion ($3.3 billion)–12.7 percent up on the previous year. Fuel costs for the third quarter grew by 8 percent during the third quarter and now account for 36.9 percent of group expenditure.

Historically, SIA has benefited from Singapore’s free-market philosophy, which has led to many Open Skies agreements, not least that established in 2007 with the UK, which allows the carrier to pick up transatlantic U.S.-bound traffic in London. After a long wait, Singapore and its neighbor Malaysia are preparing to implement an Open Skies policy in December. Ahead of this, starting this month, daily services by low-cost carriers, including SIA subsidiary Tiger Airways, are permitted on the Singapore-Kuala Lumpur route, which already supports 182 flights each week.

Apart from Australia, another major market for SIA is the northern section of the so-called “kangaroo” route from Australasia to London, which is set become the second A380 destination in mid-March. SIA received its second A380 on January 11 and the third is due to arrive this month. Also high in the destination pecking order for the A380 are San Francisco–via Hong Kong–and Tokyo.

In addition to the three A380s, SIA plans to add five 777-300ERs by the end of this financial year. With five of its 747-400s being withdrawn during the same period, the fleet should then comprise 97 aircraft. Although it has been pleased to introduce the stretched 777, SIA is more circumspect about a larger cabin A380 (in contrast to Emirates, which cannot wait for Airbus to offer the higher capacity A380-900). SIA believes that Airbus should not hurry to launch the longer variant, which is likely to be offered with capacity for 625 to 635 passengers, rather than the previously discussed 656.

Following introduction of enhanced business- and economy-class cabins, SIA used the A380 to launch so-called first-class suites as the final element of an upgraded cabin product range. In contrast to some of the more outlandish configurations proposed for the giant airliner’s two passenger decks, SIA has decided against such things as duty-free shops or lounge areas, although the A380s sport a single stand-up bar in the business-class section.