Wednesday, June 07, 2017

‘Operating costs are pretty high in India’

Singapore Airlines surprised its investors by reporting a net loss in the March 2017 quarter, while full-year profit halved from its numbers in FY16. In an interview with BusinessLine, David Lim, General Manager – India, Singapore Airlines, speaks about Singapore’s national carrier’s commitment to the Indian market, despite the tough times that the parent company is facing, and the changes he’d like to see in the domestic aviation scene. Excerpts:

It’s been a difficult quarter for Singapore Airlines. Does this change strategy for markets like India?

With fares falling rapidly, yields are falling for airlines and all airlines are suffering. But we are prepared for competition and for yields to continue to be under pressure. We are working on managing costs better and in recent years, we have been helped by fuel prices coming down. But it’s a difficult time for the aviation business in general. But our East-bound market is continuing to grow. Also, if you look at our financial results, we have also mentioned that we’re going into the next phase. With our portfolio size, we are able to right-size our aircraft. We’re seeing some of this (in other markets). We (Singapore Airlines) used to fly to Hangzhou in China, and we were flying to Jeddah for Haj pilgrims; now we’ve passed on both to Scoot (the low-budget division of Singapore Airlines). Between the four airlines — Singapore Airlines, SilkAir, Scoot and Tigerair — we’re able to right-size the product.

Are you considering making further investments in India?

No further investments for now. We’ve increased, over the last 4-5 months, the number of services we offer, we’re flying more to Ahmedabad since that market has grown.

During peak periods, we are also increasing flights in sectors where there is demand. In September, during Durga Puja, we increase flights to Kolkata, and of course during Diwali.

For the group, it’s 150 services a week covering 15 destinations in India, that’s a lot. I think it’s the second biggest for us after China. We also have Vistara here, and they will expand their network.

Vistara is likely to start international flights next year. What synergies do you foresee?

Most of these synergies will be from Delhi and Mumbai, which we can use as a connecting hub. But first and foremost, Vistara wants to bring a new flying experience to Indian travellers. We will codeshare with Vistara but the rest is up to Vistara’s management. They will map out their strategy. But I think as an airline, Vistara recognises its heritage as being part of the Singapore Airlines and the Tata group.
06/06/17 Tanya Thomas/BusinessLine