Description
An airline is a company that provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body.
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AIRLINES-the single worst industry 0n January 2002 PART I THE INDUSTRY It’s all about cancelled flights, excruciating delays, anxiety and safety concerns. Post 11TH SEPTEMBER 2001* scenario in USA: ? Earnings $277bn. ? Logistics [affecting the supply chain] 65bn. ? Insurance liabilities 35bn ? Workplace security 18bn. ? Information technology [disaster recovery systems] 15bn. ? Travel transportation waits 12bn. ? Employee costs [absenteeism] 6bn. TOTAL BUSINESS SPEND $151BN! . INFRASTRUCTURE-the Indian scene Industry has been deregulated, but airports, air-traffic controls, safety, runways are not! Marketing, services, and production are operating in 2000`s mode, while execution is in the 1970`s! Demand on infrastructure is greater than the supply. People need to go safely where they want to go. They want to fly out at 0800 hours and come back home at 1900 hours from a Bombay-New Delhi trip. We can’t stagger flights. Government will let you know.
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Airports are controlled. Can you taxi out? Government will let you know. Can you push back? Government will let you know. Can you take off? Government will let you know. Can you take off? Government will let you know. Are we safe? Government will let you know. Is the capacity of Airports sufficient for today and tomorrow? Government will let you know. Government is focussed on telling people WHY they are delayed instead of concentrating on how to prevent being delayed. [Put ointment on the wounds, instead of-“lets stop wounding people”.] Put money into technology to safely space, land and navigate. BASICS[ mostly according to Herb Kelleher founder, CEO of SWA] ? A clean safe and reliable transportation is basicnever ever make it secondary to MONEY-PRICEPROFIT. Never! ? A dependable, predictable behavior. Customer must know what he is exactly going to get. ? Don’t forget about fundamental values [quality, excellence, and reliability]-or you will never win. ? It is people business-a dynamic business. Safety issues, public good are good governance. ? Losses can be cut by rewarding employees to perform well. Become collective winners and give things customers value! ? Sam Walton said-“if you take over a company and
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treat employees badly, they will take it out on the customers. Company will be ruined.” ? Who comes first? Your employees? Your shareholders? Or your customers? Employees come first-says Herb Kelleher of South West airlines [the other most profitable airline in these troubled times!] ? “I can fix an airplane when I WANT to fix it, than when I don’t want to fix it”-says Bethune of Continental Airlines [who has adopted the SWA model to run an airline]. ? We are superior in customer satisfaction because we are superior in employee satisfaction. ? You have to team player not a prima donna! You have to best at what you are. ? Market dominance makes you lethargic and noncaring. ? Spend aviation surcharge fund on aviation instead of government deficit off-setting ? And technology spend? GPS [Global positioning system] by sattallites for take offs and landing. Vortex detectors so planes can fly close together. Add runways. Modernize control towerts. Mechanize passenger movement. BAD CUSTOMERS? In bad moments lean towards a customers, rather than away-he is inconvenienced by delay. He needs it most. But you have to put your finger on something. ATC tells you don’t take off. WAIT. Cant let off passengers, how do you collect them? You will loose your place in the line- take off now!
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AIR RAGE-physical abuse-because every time you can’t accommodate every ones timetable. Employees can’t go out on the frontline if company is not behind them. CUSTOMER IS NOT ALWAYS RIGHT. You can’t make anything work if it cost too much. INDUSTRY: The structure of the world airline industry is based upon the Chicago Conference, 1944, which stated in Article 1, The contracting states recognise that every state has complete and exclusive sovereignty over airspace above its territory. The principle objective was to achieve multilateral system of exchanging air rights. The conference failed to achieve this and instead concluded with a system of bilateral international agreements over landing rights, gateways and the six freedoms. 1st freedom: the right of a carrier to fly over the territory of another country without landing[e.g. SIA can fly over India] 2nd freedom: the right of a carrier to land on the territory of another country, for a non-commercial purpose[e.g. Air India can make a refueling stop at Kuala Lumpur] 3rd freedom: the right of a carrier to disembark passengers from home country in another country[e.g. Air India can leave Indians in Singapore] 4th freedom: the right of a carrier to take passengers from one country and disembark them in its home
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country [e.g. AirIndia can take Thai travelers to Bombay.] 5th freedom: the right of the carrier to land and take off from a second country and disembark passengers travelling to or from a third country [e.g. Air India can pick Singaporean travelers form Singapore, land in Bangla desh, disembark a few of them and continue to Bombay.] 6th freedom: the right of a carrier to embark and disembark passengers travelling wholly within the boundaries of another country [e.g. AirIndia flight from Bangkok can stop at Kuala Lumpur, embark and disembark any passengers, then continue to Colombo before leaving for Bombay.] Each government designated one of its airlines [its nationalized flagship in most instances, as one of the two airlines [the other being the opposite country’s designated airline entitled to share what was in effect two-firm cartel on each route. In 1945, a further pillar of post-war aviation industry was established at the Havana Conference, where 31 nations approved the articles of revised IATA [International Air Transport Association]. In 1946, USA and Britain [the two countries most responsible for Chicago Agreement] signed the Bermuda Agreement, what was to become the prototype of all other bilateral agreements. The most important clause of the agreement delegated the question of whether and how to set fares to the IATA. [as more nations joined
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the fare fixing, IATA became the both the instrument and scapegoat for the natural tendancies of the airlines to restrict competition-as critics remarked.] IATA also coordinated the growing network of flight routes and timetables. It created a means whereby the travelers could freely transfer from one airline to another using the same ticket called interlining. It also set up and controlled common safety and navigational standards, engineering cooperation and pilot training programmes. USA The US airline policy in the late 1970`s was an ominous harbinger of change for cozy cartels. President Carter appointed Alfred Kahn, economist, professor and ardent deregulator, to head the CAB [civil aeronautics board] with a mandate to regulate the industry and eliminate the agency. This policy was formalized in 1978 with the passage of the Airline Deregulation Act which led down a six year time table [ending in 1985] for the return of the US domestic airline to discipline of the free market and for the abolition of the CAB. It phased out entry and restrictions and progressively allowed airlines increasingly freedom to fly the routes they wished with frequencies and prices they wished. The airlines previously prohibited from trading routes began exchanging them to establish efficient networks. Deregulation Complete freedom to set airfares came on January
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1983. This led to rapid entry of instant airlines, principally on local routes where flexibility was an advantage. 22 new airlines entered. Between 1938 and 1983[time of deregulation] there were 28 trunk ones without change. Demand In forty years of no entry, there was several thousand percentage increased in airline service demand. The new entrants took 12% of airlines market share. They were unable to get landing rights in most popular and congested airports-these rights were allocated in scheduling committee made up of the older carriers under antitrust immunity. Thus, the established ones maintained a significant market advantage. In 1984, Justice department of Transportation allowed an experimental policy of encouraging landing rights of four major airports [Washington, Chicago, and two in New York city]. Pre-1982 period also coincided with a tremendous boom in the economy and airlines were unable to adjust their capacity, fuel price increase followed and so recession. Industry losses mounted to $733 million. However, since 1982, the results have been positive. Load factors increased, prices fell, price discrimination became less common, and route structure shifted to more efficient HUB AND SPOKE system with fewer multi stop flights and greater reliance on smaller narrow bodied aircraft. Economies of scale appear to small, potential entrants make the markets contestable. On the whole economy benefited from deregulation,
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smaller consumer groups their were adverse consequences-local flight were cross subsidized from long haul ones, were now lost or faced higher fares [traditionally CAB had set fares proportionate to distance, flights on short distance earned lower margins, since cost per mile declines with distance].
HUMAN RESOURCE: The salary levels were higher in airlines even for back office jobs. Deregulation meant new entrants were not tied to historical high-cost wage agreements. They hired new entrants at much lower salaries- pilots at $40000vs. $80000 previously. In addition, stewardesses at $15000 rather than $35000-average employee compensation was $22000, against $42000 previously. The cost was 18% of operating expenses now compared to 37% previously. This enabled the no frills airlines to compete more effectively. The older ones also had to re-look into costs [Continental eliminated 2/3rds of its labor workforce in 1983, after filing for bankruptcy and halved the wages of the remainder, nine others followed suit. The charter market disappeared since its economic justification rested on regulatory restrictions of competition in the scheduled market.] $15bn [government’s bailout package with no strings attached, [like it gave $1,2 bn. in loan guarantees during Jerry Greenwald`s time, it got Chrysler’s concessions and warrants which it sold for $ 300m] wont begin to fix it. It was already financially vulnerable on that date.
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When times are good, its captains of industry accumulate planes and load on debt. When times are bad, they plead for anti-trust relief so that they can dominate their hubs even more completely than they already do. Planes are flying at less than 50% capacity. Passengers and pilots are edgy. Compounded by worst labour management relations. Airlines also mean enduring miserable service and mismatched seats, for some. 20% of work force is cut. Union contracts force them to furlough their lowest paid employees first; the labour savings will be modest. The rescue package will keep the planes in the sky at the basic level, at least in the short run. Airlines have to rationalize operations-cost cuts, operations efficiencies. Washington should take away the power of strikes by pilots-the most crushing burden to cripple a carrier. Senator John McCain and CEO’s are sponsoring a bill that could impose mandatory arbitration when the unions and management can’t agree: that could go a long way toward eliminating the coercive power of strikes. “It’s the only way to make balance of power relatively equal”, says Delta’s Mulin. Although mandatory arbitration has had an inflationary effect in baseball, it would be an immense improvement for the airlines. Caving in even when you know demands are disastrous, would no longer be the only option. Tough love, as every parent knows, is never easy. But often works. The government should remember the trauma of Chrysler as the airlines plead their case for
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support in Washington. Earnings It is high fixed costs industry.75 % of its spending goes for airplane leases, interest payments and labour, revenues fall much faster than expenses. “All this in a period when no one is flying. Its incredible”-says Gary Wilson Northwest airline chairman. 1995-2000 earnings were $23 bn. but ROCE WAS only 8% vs. 10% for automotive and 12% for computer industry. The culprit is large interest payments, a mounting debt load [$ 30 bn. = to industry `s entire equity!] (*When crashing aircraft attacked the WTC.) In the late 2000, the airlines began loosing their most lucrative customers-business travelers-in hordes. Normal cost cutting in a down turn plus this cost centre is the first target when things are bad. Business tickets had risen by 76% between 1996 and 2001. [Atlanta to San Francisco went up $1216 to $2048]. Spread between business and leisure travel got wider [15% from business and 40% of revenues], and lack of availability of enough seats-caused the fare explosion and travel curtailing orders from CFO’s-resort to teleconferencing and videoconferencing [Daimler Chrysler had $100 million slashed to $60 m annually] to save money. The business travel dropped 30% since January 2001. Corporate exodus bit hard. Losses estimate $10bn. Industry shrinks to 1989 size. To soften the losses the industry
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will do three things: 1. Reduce flights[20% less capacity doesn’t mean 20% lower costs, expenses will drop 10% only-Gordon Bethune-CEO Continental] 2. reduce personnel 3. Delay the delivery of aircraft [Boeing And Airbus had it]. Security checks take longer, less flights can take off in a day add to rising expenses. A 15-minute in each turn around time means 20 % of departures gone! Capital spending is tied up in agreements. It is $20bn a year for planes already on order, or on factory floor-delaying means saving a couple of billion. The industry will need another $9bn. next year. If traffic rebounds, forecast is another $5bn. loss per year. Industry is divided into two main groups: 1 low cost and discount airlines like SWA [the strongest in US, strongest balance sheet, good relations with unions, and solid profits], JetBlue, AirTran, while Frontier, and Spirit are in trouble [shallow pockets.] 2. High cost, hub-and-spoke carriers like American and United. Delta is the strongest [$2,5bn. in cash and can raise another $5 bn. by mortgaging its assets. Continental is more profitable in than Delta. US Airways, American west are with weak finances and are vulnerable. THE EUROPEAN SCENE In June 1983 Margaret Thatcher reelected for the
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second term, announced plans for the sale of nationalized British Airways and twelve more to private sector [besides nine other government organizations]. Free market was to be preferred medium for achieving the government’s economic goals- conservative party never believed that that the business of government is to the government of business-Nigel Lawson, chancellor of Exchequer. There were massive cuts in over manning, and privatization reduced the power of monopolies and encouraged competition. Market 1. The charter market 42,2% and essentially a competitive one. BI-lateral agreements, tariff fixing or revenue pooling did not regulate it. It is essentially part of a holiday package and isolated from international scheduled market. 2. Domestic schedule market-20% of airline revenues in UK. This regulated but also competitive. 3. International schedule market-is remaining 36,1 % powered by exclusive use of Heathrow airport and its route structure traditionally. North American –western Europe route was decide by UK signing Bermuda and US 2 agreement in 1977 to liberalize fares across the Atlantic. US also offered the Dutch more routes, while UK did not want to sign-with no restriction on entry, capacity or number of designated carriers and unilateral tariffs only control over predatory prices. UK followed Holland’s Schipol by
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offering Heathrow and Gatwick. The deregulation of North Atlantic routes was signed and fares reduced dramatically. -Minimum and maximum were fixed. Laker`s Sky train and Virgin entered later to make it more competitive. Laker went bankrupt; Europe’s cost structure was 67% higher than US airlines. Labour rates are 27% vs. 13% of US. IATA It was the price fixing body, and in 1960, its members carried 90% of world’s scheduled passengers traffic, which came down to 70% by 1983. Singapore Airline was a non-IATA airline so also Virgin and People Express. ASIAN SCENE: A contemplative Cheong Choong Kong is not normally given to hyperbole. But he says SIA is facing its “severest test ever” and the pain is only starting, it means the rest are also in crisis. Why SIA is affected more than most in Asia, because its limits within its domestic base led him offshore in a desperate manner in search for growth. Ownership: 49% VIRGIN ATLANTIC, London [900 million, in 1999, are worth only about a third.] 25% AIR NEW ZEALAND [$250 million are worth 90 % less, also due to bankruptcy of its partner Ansett in Australia. The day after this was announced, SIA propped up another $65m for another 10% of ANZ, which is now in trouble. 16000 jobs at stake, and a 70-
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year national icon going belly up has angered Australian regulators] Both deals are liabilities due to travel phobia plaguing the skies. Passenger traffic is down about 20% [translates into a loss of $1,5 billion over the next year for SIA group. Shares are down by 35% since the crisis. “With associates like these, who needs enemies”-says UBS Warburg aviation analyst Timothy Ross. Cash rich SIA will see itself through this crisis and emerge as a net buyer, a view also echoed by SIA chairman Koh Boon Hwee, who believes the crisis “will accelerate the liberalization of the industry and allow the consolidation that should have taken place, to take place.” And who is Next? Kuala Lumpur is impatient with the mismanagement of Malaysian Airlines burdened with debt of $2bn. And smarting from a $340 million loss for fiscal 2000. Hong Kong’s Cathy pacific and SIA are talking about merger to form a mighty Asian carrier. It seems politically difficult, but analysts are making a good sense out of such a move. Asia is focussed on survival strategies. As time and war crisis dissipates, the fittest will survive.
PART II. SINGAPORE AIRLINES
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SINGAPORE AIRLINES
Over the last two decades, Singapore Airlines has grown from a regional airline into one of the world's leading passenger and cargo carriers. SIA has a modern and young fleet of aircraft. Home base, Changi Airport, is regularly voted the world's best, and serves as our gateway to Asia and beyond.
The History of Singapore Airlines
Our History From Humble Beginnings...
We have come a long way from our humble origins as a small regional airline. Our story began in May 1947, when Malayan Airways first operated a twin-engined Airspeed Consul between Singapore, Kuala Lumpur, Ipoh and Penang. Passenger demand grew and so did the fledgling airline. By 1955 it had a fleet of Douglas DC-3s. The creation of the Federation of Malaysia in 1963 prompted two name changes; first to Malaysian Airways and then, three years later, to Malaysia-Singapore Airlines (MSA) in deference to the carrier's joint shareholders, the governments of Malaysia and Singapore.
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MSA ceased operations in October 1972 and two new airlines, Malaysia Airline System (now called Malaysia Airlines) and Singapore Airlines, were born. At its launch, the new national flag carrier of Singapore had a modest fleet comprising 10 aircraft, a staff of 6,000 and a route network spanning 22 cities in 18 countries. It also had 25 years of experience and boundless ambition. Singapore Airlines immediately began to expand and modernise its fleet, setting standards of service that others could only follow. Far-sighted planning, investment and product innovation propelled its growing reputation and profitability. The little airline from the small island state in Asia became big.
SIA Today ...To a World Class Carrier Today, SIA is internationally recognised as one of the world's leading carriers. Our route network spans 90 cities in 40 countries and we have a modern fleet of aircraft. But we never forget that we owe our size and commercial success to our customers. Singapore Airlines was the pioneer of in-flight services such as free drinks and complimentary headsets.
With innovations like our revolutionary KrisWorld interactive entertainment system, we are still setting the standards today -- standards which have made the name of Singapore Airlines synonymous with impeccable service around the globe.
17 Cheong Kong’s managerial style Route out inefficient work practices Joint decision making [managers and crew] Employees themselves criticize laggards [how many times phones rings before someone answers the customer?] Wait time? Wine knowledge Coping with emergencies Four evaluations per year Clear goals Expectations are realistic Low interference Polite evasiveness-[a Japanese style vs. strongman tactics the US style] Anticipate global changes rather than put out fires Lively internal debate $300 million Investments in Project Rainbow not to catch up but leapfrog over other airlines and persevere in a slump market. First class, passengers get restaurant style service-hot foods direct from the galley-no set menu, no fixed time for eating. Plus turned down beds, Even economy class have free champagne[at least Charles Heidsiek, if not Moet Chandon or Dom Perignon or Krug}
18 Advertising excellence “Singapore Girl-you have a way with people-taking your smile across half the world or more-you are a great way to fly”. Promotes the virtues of a sarong-kebaya clad Singapore Girl. This is consistent since last 28 years. She even is depicted in Madame Tussaud`s Wax Museum in London.
The 2006 Readers' Choice Best in Business Travel Award Winners: Best overall airline in the world: Singapore Airlines Best airline for North American travel: Continental Airlines Best airline for international travel: Singapore Airlines Best business class in the world: Virgin Atlantic Airways Best first class in the world: Emirates Best premium economy class in the world: United Airlines Best economy class in the world: Singapore Airlines Best business class to Europe/Trans-Atlantic: British Airways
19 Best business class to Eastern Europe: Lufthansa Best business class to Nordic Countries: Scandinavian Airlines (SAS) Best business class to Mexico/Latin America: AeroMexico Best business class to South America: LAN Airlines Best business class to Canada: Air Canada Best business class to Asia/Trans-Pacific: Korean Air Best business class to the South Pacific/Australia/New Zealand: Air New Zealand Best business class to the Middle East: Emirates Best business class to Africa: South African Airways Best low-cost carrier: Frontier Airlines Best flight attendants in the U.S.: Continental Airlines Best in-flight services in the U.S.: Continental Airlines Best flight attendants in the world: Asiana Airlines Best in-flight service in the world: Asiana Airlines Best business class cuisine/menu: Singapore Airlines Best airport lounge: Delta Air Lines Best airline alliance: Star Alliance Best frequent-flier program: Delta SkyMiles Best airline Web site: Delta.com Best airport in the world: Singapore Changi International Airport Best airport in North America: Denver International Airport Best hotel chain in the world: Marriott International Best hotel chain in North America for business travel: Marriott Best luxury hotel chain for business travel: Four Seasons Hotels & Resorts Best individual hotel in North America for business travel: The Peninsula Chicago Best hotel Web site: Marriott.com Best hotel rewards program in the world: Marriott Rewards Best hotel chain in Latin America: Sheraton Latin America Best hotel chain in Europe: Sofitel Hotels & Resorts Best hotel chain in Eastern Europe: Hilton Hotels Best hotel chain in the Middle East: Jumeirah Best Web site for booking travel: Travelocity.com Best credit card for business travelers: American Express Best credit card rewards program: American Express Membership Rewards Best car-rental company in North America: Hertz Best wireless service provider in the world: Verizon Wireless Best overall luggage for business travelers: Travelpro Best carry-on luggage for business travelers: TUMI Best international courier service: DHL Best overnight courier service in North America: FedEx
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'India is at the centre of our vision for the future'
The Hindu Business Line: June 21, 2010
We are firm believers in the liberalisation of the aviation industry and open competition. We believe competition will help grow the market for everyone. CHAI WOO FOO, GM, INDIA, SINGAPORE AIRLINES Singapore: With the revival in air travel worldwide, Singapore Airlines (SIA) sees India emerging as a strong market. And to cash in on this opportunity, SIA has chalked out aggressive strategies to attract passengers by increasing the frequency of its flights and also leveraging and promoting the ‘Singapore hub', from where passengers can fly on to other destinations. As SIA completes its 40 {+t} {+h} year of operations in India, Mr Chai Woo Foo, General Manager, India, Singapore Airlines, spoke to Business Line about the airline's India strategy. Q: Are you seeing a revival in demand on the India route? Is it across classes? A: The rebound in air travel from India marks the beginning of a long-term revival in demand from this sector. India is among the key markets at the centre of our vision for the future. Take, for instance, the recent cabin enhancement programme for our Boeing 777-200 day-flights, which we see, as an investment in enhancing the Indian customers' travel experience. Our focus will be to continually ensure that our product offerings are relevant and competitive for the Indian market. Q: What kind of revival are you seeing? A: While the first-timers are keen to travel to Singapore, Thailand and Malaysia, those who have travelled before are venturing out to places such as New Zealand and Australia. Capacity is also returning to premium levels in business class with a surge in corporate travel as well. We recently re-instated double dailies on the Mumbai and Delhi routes, taking the total number of weekly flights being serviced on the India route to 45. Q: What is your strategy vis-à-vis SilkAir? At the moment,
21 SIA operates to five cities, including Ahmedabad, Bengaluru, Chennai, Kolkata, and Mumbai, while SilkAir operates to Hyderabad, Trivandrum, Coimbatore and three other cities. Any plans to upgrade the SilkAir Flights to SIA flights? If so, what will the increase in capacity lead to? SilkAir is a full service airline which offers quality products and services at competitive fares. The provision of the two latest services from Bengaluru (effective May 17) and Chennai (effective June 14) are in line with our philosophy of providing a wider product offering to our customers. This deployment takes the total number of cities from where SilkAir operates to six, including Kochi. Q: Is there sufficient demand to sustain both the airlines? A: There is sufficient demand to sustain both SilkAir and Singapore Airlines' capacity. The SilkAir services are intended to complement the services offered by Singapore Airlines and introduce more flexibility and flight choices for both SilkAir and Singapore Airlines' customers. Both airlines are separate entities and have their own unique proposition with which they have entered the Indian market. Q: The Asean open-sky agreement allows unlimited flights to 18 tourist destinations. SIA used this to operate to Amritsar. Any plans to re-introduce the flight to Amritsar? To which other destinations of the 18 to which you are allowed unlimited flights will you operate? A: We do not have any plans to re-introduce flights to Amritsar currently. Of the 18 destinations, Singapore Airlines is currently operating to Ahmedabad, while SilkAir operates to Kochi and Thiruvananthapuram. There are no plans to operate to the other open-sky destinations at this stage. Q: There was the issue of commission. Has that affected sales in India? A: Singapore Airlines caters mainly to the needs of business and leisure travellers who are constantly looking for the best experience in air travel. Over the years, we have been able to create differentiated experiences to ensure that the travel experience is more than desirable. Our passengers are also those who expect the best experience and service and, hence, are not likely to stop flying on the basis of short-term issues. We build our business strategy for the long term and initiatives such as the cabin enhancement programme make sure that we
22 remain the preferred choice of airline for our customer base. Q: Air Asia has recently introduced low-cost flights to India. Has this put pressure on you to introduce more SilkAir Flights? How do you plan to meet the challenge? A: We are firm believers in the liberalisation of the aviation industry and open competition. We are ready for the competition from other operators, and we believe competition will help grow the market for everyone. SilkAir also has its own very strong base of loyal customers, who value the products and services it offers. Q: What has been the A-380 experience as regards India? Has there been any booking demand specifically from Indian passengers wanting to fly on the Singapore Airlines A-380? A: Singapore Airlines was the first airline in the world to introduce the A-380 to its customers. Our passengers travelling on the A-380 experience unsurpassed standards of luxury and sophistication in air travel. Yes, there an increasing number of passengers from India are flying to Hong Kong, Sydney, Melbourne, London and Paris to experience the A-380. Q: Any plans to operate flights onwards from India as you did earlier to Manchester and which you are allowed under the bilateral? A: We have no plans to operate flights onwards from India currently. Our core focus is to continue building on the connectivity between India and Singapore, and also leverage on our Singapore hub, where passengers can fly beyond to other destinations.
doc_898867957.doc
An airline is a company that provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body.
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AIRLINES-the single worst industry 0n January 2002 PART I THE INDUSTRY It’s all about cancelled flights, excruciating delays, anxiety and safety concerns. Post 11TH SEPTEMBER 2001* scenario in USA: ? Earnings $277bn. ? Logistics [affecting the supply chain] 65bn. ? Insurance liabilities 35bn ? Workplace security 18bn. ? Information technology [disaster recovery systems] 15bn. ? Travel transportation waits 12bn. ? Employee costs [absenteeism] 6bn. TOTAL BUSINESS SPEND $151BN! . INFRASTRUCTURE-the Indian scene Industry has been deregulated, but airports, air-traffic controls, safety, runways are not! Marketing, services, and production are operating in 2000`s mode, while execution is in the 1970`s! Demand on infrastructure is greater than the supply. People need to go safely where they want to go. They want to fly out at 0800 hours and come back home at 1900 hours from a Bombay-New Delhi trip. We can’t stagger flights. Government will let you know.
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Airports are controlled. Can you taxi out? Government will let you know. Can you push back? Government will let you know. Can you take off? Government will let you know. Can you take off? Government will let you know. Are we safe? Government will let you know. Is the capacity of Airports sufficient for today and tomorrow? Government will let you know. Government is focussed on telling people WHY they are delayed instead of concentrating on how to prevent being delayed. [Put ointment on the wounds, instead of-“lets stop wounding people”.] Put money into technology to safely space, land and navigate. BASICS[ mostly according to Herb Kelleher founder, CEO of SWA] ? A clean safe and reliable transportation is basicnever ever make it secondary to MONEY-PRICEPROFIT. Never! ? A dependable, predictable behavior. Customer must know what he is exactly going to get. ? Don’t forget about fundamental values [quality, excellence, and reliability]-or you will never win. ? It is people business-a dynamic business. Safety issues, public good are good governance. ? Losses can be cut by rewarding employees to perform well. Become collective winners and give things customers value! ? Sam Walton said-“if you take over a company and
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treat employees badly, they will take it out on the customers. Company will be ruined.” ? Who comes first? Your employees? Your shareholders? Or your customers? Employees come first-says Herb Kelleher of South West airlines [the other most profitable airline in these troubled times!] ? “I can fix an airplane when I WANT to fix it, than when I don’t want to fix it”-says Bethune of Continental Airlines [who has adopted the SWA model to run an airline]. ? We are superior in customer satisfaction because we are superior in employee satisfaction. ? You have to team player not a prima donna! You have to best at what you are. ? Market dominance makes you lethargic and noncaring. ? Spend aviation surcharge fund on aviation instead of government deficit off-setting ? And technology spend? GPS [Global positioning system] by sattallites for take offs and landing. Vortex detectors so planes can fly close together. Add runways. Modernize control towerts. Mechanize passenger movement. BAD CUSTOMERS? In bad moments lean towards a customers, rather than away-he is inconvenienced by delay. He needs it most. But you have to put your finger on something. ATC tells you don’t take off. WAIT. Cant let off passengers, how do you collect them? You will loose your place in the line- take off now!
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AIR RAGE-physical abuse-because every time you can’t accommodate every ones timetable. Employees can’t go out on the frontline if company is not behind them. CUSTOMER IS NOT ALWAYS RIGHT. You can’t make anything work if it cost too much. INDUSTRY: The structure of the world airline industry is based upon the Chicago Conference, 1944, which stated in Article 1, The contracting states recognise that every state has complete and exclusive sovereignty over airspace above its territory. The principle objective was to achieve multilateral system of exchanging air rights. The conference failed to achieve this and instead concluded with a system of bilateral international agreements over landing rights, gateways and the six freedoms. 1st freedom: the right of a carrier to fly over the territory of another country without landing[e.g. SIA can fly over India] 2nd freedom: the right of a carrier to land on the territory of another country, for a non-commercial purpose[e.g. Air India can make a refueling stop at Kuala Lumpur] 3rd freedom: the right of a carrier to disembark passengers from home country in another country[e.g. Air India can leave Indians in Singapore] 4th freedom: the right of a carrier to take passengers from one country and disembark them in its home
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country [e.g. AirIndia can take Thai travelers to Bombay.] 5th freedom: the right of the carrier to land and take off from a second country and disembark passengers travelling to or from a third country [e.g. Air India can pick Singaporean travelers form Singapore, land in Bangla desh, disembark a few of them and continue to Bombay.] 6th freedom: the right of a carrier to embark and disembark passengers travelling wholly within the boundaries of another country [e.g. AirIndia flight from Bangkok can stop at Kuala Lumpur, embark and disembark any passengers, then continue to Colombo before leaving for Bombay.] Each government designated one of its airlines [its nationalized flagship in most instances, as one of the two airlines [the other being the opposite country’s designated airline entitled to share what was in effect two-firm cartel on each route. In 1945, a further pillar of post-war aviation industry was established at the Havana Conference, where 31 nations approved the articles of revised IATA [International Air Transport Association]. In 1946, USA and Britain [the two countries most responsible for Chicago Agreement] signed the Bermuda Agreement, what was to become the prototype of all other bilateral agreements. The most important clause of the agreement delegated the question of whether and how to set fares to the IATA. [as more nations joined
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the fare fixing, IATA became the both the instrument and scapegoat for the natural tendancies of the airlines to restrict competition-as critics remarked.] IATA also coordinated the growing network of flight routes and timetables. It created a means whereby the travelers could freely transfer from one airline to another using the same ticket called interlining. It also set up and controlled common safety and navigational standards, engineering cooperation and pilot training programmes. USA The US airline policy in the late 1970`s was an ominous harbinger of change for cozy cartels. President Carter appointed Alfred Kahn, economist, professor and ardent deregulator, to head the CAB [civil aeronautics board] with a mandate to regulate the industry and eliminate the agency. This policy was formalized in 1978 with the passage of the Airline Deregulation Act which led down a six year time table [ending in 1985] for the return of the US domestic airline to discipline of the free market and for the abolition of the CAB. It phased out entry and restrictions and progressively allowed airlines increasingly freedom to fly the routes they wished with frequencies and prices they wished. The airlines previously prohibited from trading routes began exchanging them to establish efficient networks. Deregulation Complete freedom to set airfares came on January
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1983. This led to rapid entry of instant airlines, principally on local routes where flexibility was an advantage. 22 new airlines entered. Between 1938 and 1983[time of deregulation] there were 28 trunk ones without change. Demand In forty years of no entry, there was several thousand percentage increased in airline service demand. The new entrants took 12% of airlines market share. They were unable to get landing rights in most popular and congested airports-these rights were allocated in scheduling committee made up of the older carriers under antitrust immunity. Thus, the established ones maintained a significant market advantage. In 1984, Justice department of Transportation allowed an experimental policy of encouraging landing rights of four major airports [Washington, Chicago, and two in New York city]. Pre-1982 period also coincided with a tremendous boom in the economy and airlines were unable to adjust their capacity, fuel price increase followed and so recession. Industry losses mounted to $733 million. However, since 1982, the results have been positive. Load factors increased, prices fell, price discrimination became less common, and route structure shifted to more efficient HUB AND SPOKE system with fewer multi stop flights and greater reliance on smaller narrow bodied aircraft. Economies of scale appear to small, potential entrants make the markets contestable. On the whole economy benefited from deregulation,
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smaller consumer groups their were adverse consequences-local flight were cross subsidized from long haul ones, were now lost or faced higher fares [traditionally CAB had set fares proportionate to distance, flights on short distance earned lower margins, since cost per mile declines with distance].
HUMAN RESOURCE: The salary levels were higher in airlines even for back office jobs. Deregulation meant new entrants were not tied to historical high-cost wage agreements. They hired new entrants at much lower salaries- pilots at $40000vs. $80000 previously. In addition, stewardesses at $15000 rather than $35000-average employee compensation was $22000, against $42000 previously. The cost was 18% of operating expenses now compared to 37% previously. This enabled the no frills airlines to compete more effectively. The older ones also had to re-look into costs [Continental eliminated 2/3rds of its labor workforce in 1983, after filing for bankruptcy and halved the wages of the remainder, nine others followed suit. The charter market disappeared since its economic justification rested on regulatory restrictions of competition in the scheduled market.] $15bn [government’s bailout package with no strings attached, [like it gave $1,2 bn. in loan guarantees during Jerry Greenwald`s time, it got Chrysler’s concessions and warrants which it sold for $ 300m] wont begin to fix it. It was already financially vulnerable on that date.
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When times are good, its captains of industry accumulate planes and load on debt. When times are bad, they plead for anti-trust relief so that they can dominate their hubs even more completely than they already do. Planes are flying at less than 50% capacity. Passengers and pilots are edgy. Compounded by worst labour management relations. Airlines also mean enduring miserable service and mismatched seats, for some. 20% of work force is cut. Union contracts force them to furlough their lowest paid employees first; the labour savings will be modest. The rescue package will keep the planes in the sky at the basic level, at least in the short run. Airlines have to rationalize operations-cost cuts, operations efficiencies. Washington should take away the power of strikes by pilots-the most crushing burden to cripple a carrier. Senator John McCain and CEO’s are sponsoring a bill that could impose mandatory arbitration when the unions and management can’t agree: that could go a long way toward eliminating the coercive power of strikes. “It’s the only way to make balance of power relatively equal”, says Delta’s Mulin. Although mandatory arbitration has had an inflationary effect in baseball, it would be an immense improvement for the airlines. Caving in even when you know demands are disastrous, would no longer be the only option. Tough love, as every parent knows, is never easy. But often works. The government should remember the trauma of Chrysler as the airlines plead their case for
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support in Washington. Earnings It is high fixed costs industry.75 % of its spending goes for airplane leases, interest payments and labour, revenues fall much faster than expenses. “All this in a period when no one is flying. Its incredible”-says Gary Wilson Northwest airline chairman. 1995-2000 earnings were $23 bn. but ROCE WAS only 8% vs. 10% for automotive and 12% for computer industry. The culprit is large interest payments, a mounting debt load [$ 30 bn. = to industry `s entire equity!] (*When crashing aircraft attacked the WTC.) In the late 2000, the airlines began loosing their most lucrative customers-business travelers-in hordes. Normal cost cutting in a down turn plus this cost centre is the first target when things are bad. Business tickets had risen by 76% between 1996 and 2001. [Atlanta to San Francisco went up $1216 to $2048]. Spread between business and leisure travel got wider [15% from business and 40% of revenues], and lack of availability of enough seats-caused the fare explosion and travel curtailing orders from CFO’s-resort to teleconferencing and videoconferencing [Daimler Chrysler had $100 million slashed to $60 m annually] to save money. The business travel dropped 30% since January 2001. Corporate exodus bit hard. Losses estimate $10bn. Industry shrinks to 1989 size. To soften the losses the industry
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will do three things: 1. Reduce flights[20% less capacity doesn’t mean 20% lower costs, expenses will drop 10% only-Gordon Bethune-CEO Continental] 2. reduce personnel 3. Delay the delivery of aircraft [Boeing And Airbus had it]. Security checks take longer, less flights can take off in a day add to rising expenses. A 15-minute in each turn around time means 20 % of departures gone! Capital spending is tied up in agreements. It is $20bn a year for planes already on order, or on factory floor-delaying means saving a couple of billion. The industry will need another $9bn. next year. If traffic rebounds, forecast is another $5bn. loss per year. Industry is divided into two main groups: 1 low cost and discount airlines like SWA [the strongest in US, strongest balance sheet, good relations with unions, and solid profits], JetBlue, AirTran, while Frontier, and Spirit are in trouble [shallow pockets.] 2. High cost, hub-and-spoke carriers like American and United. Delta is the strongest [$2,5bn. in cash and can raise another $5 bn. by mortgaging its assets. Continental is more profitable in than Delta. US Airways, American west are with weak finances and are vulnerable. THE EUROPEAN SCENE In June 1983 Margaret Thatcher reelected for the
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second term, announced plans for the sale of nationalized British Airways and twelve more to private sector [besides nine other government organizations]. Free market was to be preferred medium for achieving the government’s economic goals- conservative party never believed that that the business of government is to the government of business-Nigel Lawson, chancellor of Exchequer. There were massive cuts in over manning, and privatization reduced the power of monopolies and encouraged competition. Market 1. The charter market 42,2% and essentially a competitive one. BI-lateral agreements, tariff fixing or revenue pooling did not regulate it. It is essentially part of a holiday package and isolated from international scheduled market. 2. Domestic schedule market-20% of airline revenues in UK. This regulated but also competitive. 3. International schedule market-is remaining 36,1 % powered by exclusive use of Heathrow airport and its route structure traditionally. North American –western Europe route was decide by UK signing Bermuda and US 2 agreement in 1977 to liberalize fares across the Atlantic. US also offered the Dutch more routes, while UK did not want to sign-with no restriction on entry, capacity or number of designated carriers and unilateral tariffs only control over predatory prices. UK followed Holland’s Schipol by
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offering Heathrow and Gatwick. The deregulation of North Atlantic routes was signed and fares reduced dramatically. -Minimum and maximum were fixed. Laker`s Sky train and Virgin entered later to make it more competitive. Laker went bankrupt; Europe’s cost structure was 67% higher than US airlines. Labour rates are 27% vs. 13% of US. IATA It was the price fixing body, and in 1960, its members carried 90% of world’s scheduled passengers traffic, which came down to 70% by 1983. Singapore Airline was a non-IATA airline so also Virgin and People Express. ASIAN SCENE: A contemplative Cheong Choong Kong is not normally given to hyperbole. But he says SIA is facing its “severest test ever” and the pain is only starting, it means the rest are also in crisis. Why SIA is affected more than most in Asia, because its limits within its domestic base led him offshore in a desperate manner in search for growth. Ownership: 49% VIRGIN ATLANTIC, London [900 million, in 1999, are worth only about a third.] 25% AIR NEW ZEALAND [$250 million are worth 90 % less, also due to bankruptcy of its partner Ansett in Australia. The day after this was announced, SIA propped up another $65m for another 10% of ANZ, which is now in trouble. 16000 jobs at stake, and a 70-
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year national icon going belly up has angered Australian regulators] Both deals are liabilities due to travel phobia plaguing the skies. Passenger traffic is down about 20% [translates into a loss of $1,5 billion over the next year for SIA group. Shares are down by 35% since the crisis. “With associates like these, who needs enemies”-says UBS Warburg aviation analyst Timothy Ross. Cash rich SIA will see itself through this crisis and emerge as a net buyer, a view also echoed by SIA chairman Koh Boon Hwee, who believes the crisis “will accelerate the liberalization of the industry and allow the consolidation that should have taken place, to take place.” And who is Next? Kuala Lumpur is impatient with the mismanagement of Malaysian Airlines burdened with debt of $2bn. And smarting from a $340 million loss for fiscal 2000. Hong Kong’s Cathy pacific and SIA are talking about merger to form a mighty Asian carrier. It seems politically difficult, but analysts are making a good sense out of such a move. Asia is focussed on survival strategies. As time and war crisis dissipates, the fittest will survive.
PART II. SINGAPORE AIRLINES
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SINGAPORE AIRLINES
Over the last two decades, Singapore Airlines has grown from a regional airline into one of the world's leading passenger and cargo carriers. SIA has a modern and young fleet of aircraft. Home base, Changi Airport, is regularly voted the world's best, and serves as our gateway to Asia and beyond.
The History of Singapore Airlines
Our History From Humble Beginnings...
We have come a long way from our humble origins as a small regional airline. Our story began in May 1947, when Malayan Airways first operated a twin-engined Airspeed Consul between Singapore, Kuala Lumpur, Ipoh and Penang. Passenger demand grew and so did the fledgling airline. By 1955 it had a fleet of Douglas DC-3s. The creation of the Federation of Malaysia in 1963 prompted two name changes; first to Malaysian Airways and then, three years later, to Malaysia-Singapore Airlines (MSA) in deference to the carrier's joint shareholders, the governments of Malaysia and Singapore.
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MSA ceased operations in October 1972 and two new airlines, Malaysia Airline System (now called Malaysia Airlines) and Singapore Airlines, were born. At its launch, the new national flag carrier of Singapore had a modest fleet comprising 10 aircraft, a staff of 6,000 and a route network spanning 22 cities in 18 countries. It also had 25 years of experience and boundless ambition. Singapore Airlines immediately began to expand and modernise its fleet, setting standards of service that others could only follow. Far-sighted planning, investment and product innovation propelled its growing reputation and profitability. The little airline from the small island state in Asia became big.
SIA Today ...To a World Class Carrier Today, SIA is internationally recognised as one of the world's leading carriers. Our route network spans 90 cities in 40 countries and we have a modern fleet of aircraft. But we never forget that we owe our size and commercial success to our customers. Singapore Airlines was the pioneer of in-flight services such as free drinks and complimentary headsets.
With innovations like our revolutionary KrisWorld interactive entertainment system, we are still setting the standards today -- standards which have made the name of Singapore Airlines synonymous with impeccable service around the globe.
17 Cheong Kong’s managerial style Route out inefficient work practices Joint decision making [managers and crew] Employees themselves criticize laggards [how many times phones rings before someone answers the customer?] Wait time? Wine knowledge Coping with emergencies Four evaluations per year Clear goals Expectations are realistic Low interference Polite evasiveness-[a Japanese style vs. strongman tactics the US style] Anticipate global changes rather than put out fires Lively internal debate $300 million Investments in Project Rainbow not to catch up but leapfrog over other airlines and persevere in a slump market. First class, passengers get restaurant style service-hot foods direct from the galley-no set menu, no fixed time for eating. Plus turned down beds, Even economy class have free champagne[at least Charles Heidsiek, if not Moet Chandon or Dom Perignon or Krug}
18 Advertising excellence “Singapore Girl-you have a way with people-taking your smile across half the world or more-you are a great way to fly”. Promotes the virtues of a sarong-kebaya clad Singapore Girl. This is consistent since last 28 years. She even is depicted in Madame Tussaud`s Wax Museum in London.
The 2006 Readers' Choice Best in Business Travel Award Winners: Best overall airline in the world: Singapore Airlines Best airline for North American travel: Continental Airlines Best airline for international travel: Singapore Airlines Best business class in the world: Virgin Atlantic Airways Best first class in the world: Emirates Best premium economy class in the world: United Airlines Best economy class in the world: Singapore Airlines Best business class to Europe/Trans-Atlantic: British Airways
19 Best business class to Eastern Europe: Lufthansa Best business class to Nordic Countries: Scandinavian Airlines (SAS) Best business class to Mexico/Latin America: AeroMexico Best business class to South America: LAN Airlines Best business class to Canada: Air Canada Best business class to Asia/Trans-Pacific: Korean Air Best business class to the South Pacific/Australia/New Zealand: Air New Zealand Best business class to the Middle East: Emirates Best business class to Africa: South African Airways Best low-cost carrier: Frontier Airlines Best flight attendants in the U.S.: Continental Airlines Best in-flight services in the U.S.: Continental Airlines Best flight attendants in the world: Asiana Airlines Best in-flight service in the world: Asiana Airlines Best business class cuisine/menu: Singapore Airlines Best airport lounge: Delta Air Lines Best airline alliance: Star Alliance Best frequent-flier program: Delta SkyMiles Best airline Web site: Delta.com Best airport in the world: Singapore Changi International Airport Best airport in North America: Denver International Airport Best hotel chain in the world: Marriott International Best hotel chain in North America for business travel: Marriott Best luxury hotel chain for business travel: Four Seasons Hotels & Resorts Best individual hotel in North America for business travel: The Peninsula Chicago Best hotel Web site: Marriott.com Best hotel rewards program in the world: Marriott Rewards Best hotel chain in Latin America: Sheraton Latin America Best hotel chain in Europe: Sofitel Hotels & Resorts Best hotel chain in Eastern Europe: Hilton Hotels Best hotel chain in the Middle East: Jumeirah Best Web site for booking travel: Travelocity.com Best credit card for business travelers: American Express Best credit card rewards program: American Express Membership Rewards Best car-rental company in North America: Hertz Best wireless service provider in the world: Verizon Wireless Best overall luggage for business travelers: Travelpro Best carry-on luggage for business travelers: TUMI Best international courier service: DHL Best overnight courier service in North America: FedEx
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'India is at the centre of our vision for the future'
The Hindu Business Line: June 21, 2010
We are firm believers in the liberalisation of the aviation industry and open competition. We believe competition will help grow the market for everyone. CHAI WOO FOO, GM, INDIA, SINGAPORE AIRLINES Singapore: With the revival in air travel worldwide, Singapore Airlines (SIA) sees India emerging as a strong market. And to cash in on this opportunity, SIA has chalked out aggressive strategies to attract passengers by increasing the frequency of its flights and also leveraging and promoting the ‘Singapore hub', from where passengers can fly on to other destinations. As SIA completes its 40 {+t} {+h} year of operations in India, Mr Chai Woo Foo, General Manager, India, Singapore Airlines, spoke to Business Line about the airline's India strategy. Q: Are you seeing a revival in demand on the India route? Is it across classes? A: The rebound in air travel from India marks the beginning of a long-term revival in demand from this sector. India is among the key markets at the centre of our vision for the future. Take, for instance, the recent cabin enhancement programme for our Boeing 777-200 day-flights, which we see, as an investment in enhancing the Indian customers' travel experience. Our focus will be to continually ensure that our product offerings are relevant and competitive for the Indian market. Q: What kind of revival are you seeing? A: While the first-timers are keen to travel to Singapore, Thailand and Malaysia, those who have travelled before are venturing out to places such as New Zealand and Australia. Capacity is also returning to premium levels in business class with a surge in corporate travel as well. We recently re-instated double dailies on the Mumbai and Delhi routes, taking the total number of weekly flights being serviced on the India route to 45. Q: What is your strategy vis-à-vis SilkAir? At the moment,
21 SIA operates to five cities, including Ahmedabad, Bengaluru, Chennai, Kolkata, and Mumbai, while SilkAir operates to Hyderabad, Trivandrum, Coimbatore and three other cities. Any plans to upgrade the SilkAir Flights to SIA flights? If so, what will the increase in capacity lead to? SilkAir is a full service airline which offers quality products and services at competitive fares. The provision of the two latest services from Bengaluru (effective May 17) and Chennai (effective June 14) are in line with our philosophy of providing a wider product offering to our customers. This deployment takes the total number of cities from where SilkAir operates to six, including Kochi. Q: Is there sufficient demand to sustain both the airlines? A: There is sufficient demand to sustain both SilkAir and Singapore Airlines' capacity. The SilkAir services are intended to complement the services offered by Singapore Airlines and introduce more flexibility and flight choices for both SilkAir and Singapore Airlines' customers. Both airlines are separate entities and have their own unique proposition with which they have entered the Indian market. Q: The Asean open-sky agreement allows unlimited flights to 18 tourist destinations. SIA used this to operate to Amritsar. Any plans to re-introduce the flight to Amritsar? To which other destinations of the 18 to which you are allowed unlimited flights will you operate? A: We do not have any plans to re-introduce flights to Amritsar currently. Of the 18 destinations, Singapore Airlines is currently operating to Ahmedabad, while SilkAir operates to Kochi and Thiruvananthapuram. There are no plans to operate to the other open-sky destinations at this stage. Q: There was the issue of commission. Has that affected sales in India? A: Singapore Airlines caters mainly to the needs of business and leisure travellers who are constantly looking for the best experience in air travel. Over the years, we have been able to create differentiated experiences to ensure that the travel experience is more than desirable. Our passengers are also those who expect the best experience and service and, hence, are not likely to stop flying on the basis of short-term issues. We build our business strategy for the long term and initiatives such as the cabin enhancement programme make sure that we
22 remain the preferred choice of airline for our customer base. Q: Air Asia has recently introduced low-cost flights to India. Has this put pressure on you to introduce more SilkAir Flights? How do you plan to meet the challenge? A: We are firm believers in the liberalisation of the aviation industry and open competition. We are ready for the competition from other operators, and we believe competition will help grow the market for everyone. SilkAir also has its own very strong base of loyal customers, who value the products and services it offers. Q: What has been the A-380 experience as regards India? Has there been any booking demand specifically from Indian passengers wanting to fly on the Singapore Airlines A-380? A: Singapore Airlines was the first airline in the world to introduce the A-380 to its customers. Our passengers travelling on the A-380 experience unsurpassed standards of luxury and sophistication in air travel. Yes, there an increasing number of passengers from India are flying to Hong Kong, Sydney, Melbourne, London and Paris to experience the A-380. Q: Any plans to operate flights onwards from India as you did earlier to Manchester and which you are allowed under the bilateral? A: We have no plans to operate flights onwards from India currently. Our core focus is to continue building on the connectivity between India and Singapore, and also leverage on our Singapore hub, where passengers can fly beyond to other destinations.
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