Singapore Airlines offers freebies, discounts; struggles with demand

Mumbai: With nearly two months of boycott by travel agents in India, Singapore Airlines Ltd and the island nation are directly approaching passengers and tourists with promotional fares and freebies.
To counter the boycott, Singapore Airlines, the world’s largest carrier by market value, is offering discounts on tickets booked online.
The Singapore Tourism Board (STB) has announced an India-specific promotional scheme. “STB has dedicated up to S$500,000 (Rs1.65 crore) worth of free air tickets to be won before the closing date of 31st May,” the board said in a statement on Wednesday.
SOTC, a unit of travel firm Kuoni Travel (India) Pvt. Ltd, has announced packages starting at Rs22,950 for a three-night stay at Singapore. This includes return airfare and city tours, as well as free tickets to tourist spots for the first 100 customers.
Travel agents started the boycott late last year after several airlines, led by the National Aviation Co. of India Ltd, which runs Air India, stopped paying them a 5% commission on tickets sold. Reeling under the impact, many retracted their earlier stance, except Singapore Airlines and some other foreign carriers.
The agents then intensified protests and stopped selling Singapore as a tourist destination. India ranks as the fourth-largest tourist source for Singapore, with 770,000 visitors in 2008, or 7.6% of the visitors to the island last year.
Singapore Airlines executives were unwilling to go on record, but an executive said on condition of anonymity that the carrier would not roll back its decision to do away the commission to travel agents.
But the impact is showing already.
Singapore Airlines has already reduced operations out of India. Since we are switching passengers to other carriers, its load factor has declined, said Biji Eapen, president of the Iata Agents Association of India.
A 17 February report by brokerage firm CLSA quotes Singapore Airlines as saying India was among the airline firm’s worst performing markets with load factors on its India routes declining by 10% to 66% in the past two months.
Singapore Airlines is already struggling with falling demand, as reflected in advanced bookings, and reducing its capacity by 11% for fiscal 2010. On Friday, the airline also said it may postpone deliveries of new aircraft because of poor demand.
23/02/09 P.R. Sanjai/Livemint

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Categories: Foreign Feb 2009