‘SilkAir will continue to enjoy niche market space’

SilkAir, regional wing of Singapore Airlines, believes it has a niche place for itself in the Indian market. Entry of new players does not necessarily alter the position, says David Lau, General Manager-India, Singapore Airlines.

He said this in the specific context of his own airline joining Tata Sons to launch a full-services player in India and the Tatas teaming up with AirAsia for a separate venture.

“Tata-AirAsia is a low-cost domestic airline and Tata-Singapore Airlines will launch as a full-service, domestic airline,” Lau told Business Line.

On the other hand, SilkAir operates the Singapore Airlines Group’s narrow-body fleet. It extends the Group network by seeding and developing new destinations in Asia Pacific.

Lau admitted that the going has not been smooth for SilkAir during the second quarter of 2013-14.

It recorded a 3.5 percentage-point drop in passenger load factor to 69.0 per cent. The 6.9-per cent growth in traffic lagged behind capacity injection of 12.3 per cent.

SilkAir recorded a lower operating profit during the same period as growth of passenger carriage did not keep pace with injection of capacity to develop new markets.

RAPID EXPANSION

For the third quarter too, operating profit was lower for more or less the same reason.

Asked about the impact of slack demand, high ATF prices and depreciation of the rupee, Lau said Singapore Airlines and Silk Air have been expanding rapidly in the last two years.

More services have been launched to connect Indian cities. Recent additions have increased the combined weekly services to 107.

While the cost of ATF has risen, the number of travellers has also seen an increase during this period. Fuel hedging continues to be a tool for airlines to manage fuel costs.

Lau found the Ministry of Civil Aviation supportive thanks to its creating a favourable policy environment and building world-class infrastructure.

Today, the full service airline operates more than 350 weekly flights to 45 destinations in 12 countries.

LARGEST ORDER

SilkAir announced the largest order in its history of up to 68 Boeing 737 aircraft in August 2012. Firm orders aggregate to 23 Boeing 737-800s and 31 Boeing 737 MAX 8s.

The first aircraft entered service from Thursday last, flying to destinations including Kuala Lumpur, Penang, Phuket and Medan.

Arrival of the second plane will help add Siem Reap, Danang, Davao, Cebu and Kochi to the list of destinations from March 17.

The new aircraft will offer several enhancements in in-flight experience, including upgraded cabin interiors with more spacious overhead luggage compartments and lighting systems.

SilkAir currently operates 44 weekly flights from nine cities – Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabad, Kochi, Thiruvananthapuram, Coimbatore and Visakhapatnam.