Singapore Airlines (SQ) is arguably the most iconic airline in the world. It offers big and charismatic aircraft, comfy seats, zingy satays and saucy ads featuring the famous Singapore Girl. At it’s Changi hub, graceful koi swim in pretty ponds and fluttering butterflies munch on juicy pineapple (pictured) to keep passengers company while they wait for a flight.
The airline captures high willingness to pay passengers and it is rare to see a Singapore Airlines flight priced at the low end of the market.
But behind the scenes is an extremely well designed network and a premium cabin product that is carefully designed to match the needs of the airline’s island home. Today on Airline Revenue Economics, let’s take a look behind the scenes to see what makes SQ tick and see how they compare with the mid-east three (see article), carriers whose business model was inspired by Singapore’s success-story.
Before we proceed, a brain teaser: on all SQ planes their name is spelled in mainly capital letters, but one letter is lower-case – which is it? Answer at the end…
SQ’s fleet is much more complex than Emirates’. The mid-east mega-carrier only operates two aircraft types, Airbus 380 and Boeing 777.
SQ has a mix of long-range and single-aisles though, perhaps more comparable to that of Qatar Airways or Turkish Airlines. Their Airbus 350s come in both regional and long range configurations. Special ultra long-range 350s with no economy cabin traverse 177 degrees of longitude on their way to and from Newark Liberty International Airport in New Jersey.
Emirates and Qatar Airways have complex sub-fleets though – the Dubai-based carrier has no less than seven 380 and five 777 configurations, according to aerolopa.com. SQ may have a complex fleet of 737-800, 737 MAX 8, 777-300ER, 787-10 and of course the 380, but 350-aside they have no complex sub-fleets to manage.
Here is a map showing where SQ send each aircraft type on their 1,193 weekly missions.
Like the ME3, SQ has a small number of ‘odd’ flights that do not just leave Singapore and come back. They operate two trans-Atlantic fifth-freedom sectors (Frankfurt<>New York and Manchester<>Houston), like Emirates who operate Barcelona<>Mexico City, Milan<>New York and Athens<>New York.
There are connections across the Pacific too, with daily Tokyo<>Los Angeles and Hong Kong<>San Francisco missions that start and terminate in Singapore. Finally they have a Milan<>Barcelona fifth-freedom and a Cebu/Davao triangle.
Unlike with the ME3 though, Africa is relatively untouched by SQ. Even the airline’s cargo division (not shown on the map) only flies to Nairobi and Johannesburg. This seems surprising given how lucrative the Asia<>Africa cargo market can be. The distance from Guangzhou to Nairobi is only 449 miles (7.7%) more via Singapore than it is via Dubai. Answers on a post-card please…
Here is a map showing SQ’s flight numbering.
This gives us an idea about how they are organised. Note how the numbers are organised geographically, except for 4XX and 5XX. Our best-guess is that 4XX flights are considered ‘premium’ with longhaul aircraft where possible and 5XX flights use regional planes.
Notice how the Chinese flights have 8XX flight numbers – 8 is a lucky number in China.
Like the ME3, SQ’s schedules are highly consistent, not split by time, day or aircraft. The same plane type tends to fly each route each day. Here is a map showing SQ’s routes by frequency.
(HKG-SFO/NRT-LAX are daily and SIN-SFO/SIN-LAX direct are also daily, so SFO and LAX are double-daily in total)
Due to geography, SQ is stronger in Australia even than Emirates, with quadruple-daily flights to Sydney and Melbourne, triple-daily to Brisbane and a whopping 35 flights a week to Perth. For longhaul connections to and from Asia, SQ and Emirates/Qatar Airways are probably roughly comparable. But the ME3 are stronger in Europe and the Americas.
A note on the revenue economics of SQ’s impressive First Class product
On the double-decker A380 super-jumbo (see article), SQ has a particularly impressive First Class product. Passengers enjoy what to all intents and purposes is a state room, with comfy chair and work-dine-entertain space, plus a big bed.
No other airline has anything like this, which takes the Qatar Airways Qsuite (see article) to another level. In fact, when your favourite airline revenue economist was asked by Qatar Airways to evaluate a similar concept it was rejected by both the numbers in the model and the management team as being excessive for Business Class.
The footprint of these passengers is massive, so the impressive product comes with a whacking great opportunity cost as many Business, Premium or Economy seats could fit in the same space. Why does SQ have such an impressive product when something a little smaller would still do the job?
Long-term readers of Airline Revenue Economics may remember the nine reasons why offering First Class can make sense for airlines, revenue-wise (see article). These are:
1. Higher fares, as some passengers to voluntarily pay more for their flights.
2. Economy removal, reducing pressure on sales teams to achieve volume rather than revenue
3. Whole network value, having First Class on many flights so passengers can buy it all the time, rather than trying out competitors
4. Alliance ‘circle’ fares, unleashing more value from alliance membership
5. The “halo” effect, as passengers seeing an airline’s great First Class may be more likely to think that other cabins could be good too
6. CEO choice, where heads of business or families fly First Class and then sign a contract for hundreds or thousands of Business Class tickets, which is where the airline really makes it’s money
7. Loyalty and upgrades, as some passengers fly more or take extra co-brand deals to afford a special redemption
8. Mileage liability reduction, as First Class redeemers burn more points than they otherwise would
9. Multiplier effect on all the above.
Numbers 5 and 6 (“halo” effect and CEO choice) are likely to be more significant for SQ than they could be for other First Class operators.
First up, SQ relies on “halo” effects in general with it’s Singapore Girl-based marketing. Their 380 First Class complements and enhances other messaging of the brand.
Perhaps most importantly, Singapore is full of dynamic, growing businesses with plenty of high-powered executives who are more likely to see First Class travel as a status-symbol to flaunt compared with their equivalents in Europe or North America.
No wonder their 380 First Class is so spectacular.
For Emirates and Qatar Airways meanwhile, their First Class passengers have the budget to splash the cash on their own family’s or small business’s travel. But they lack the bulk-buying power of Singapore-based leaders, so such an impressive First Class cabin would be unlikely to be profitable in the Middle East.
Something similar might work in Hong Kong though, and Cathay Pacific’s First Class is getting old. Let’s wait and see what happens over at the fragrant harbour.
And finally…
For those still flummoxed by today’s brain-teaser, the lower-case letter on SQ’s livery is ‘n’ – SInGAPORE AIRLInES!
oliver AT ransonpricing DOT com