Singapore Airlines offers freebies, discounts; struggles with demand

Singapore Airlines offers freebies, discounts; struggles with demand
Comment E-mail Print Share
First Published: Mon, Feb 23 2009. 11 37 PM IST

Fighting odds: Singapore Airlines has already reduced operations out of India. Munshi Ahmed / Bloomberg
Fighting odds: Singapore Airlines has already reduced operations out of India. Munshi Ahmed / Bloomberg
Updated: Mon, Feb 23 2009. 11 37 PM IST
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.
Fighting odds: Singapore Airlines has already reduced operations out of India. Munshi Ahmed / Bloomberg
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.
Load factor is a measure of passenger occupancy. Iata is short for International Air Transport Association.
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.
Other Asian countries are cashing in on Singapore’s lost opportunity.
The Malaysia Tourism Promotion Board, better known as Tourism Malaysia, is aiming for at least 600,000 Indian visitors in 2009.
“We are increasing our presence in India. This has nothing do with the boycott of Singapore Airlines, or political instability in Thailand,” said P. Manoharan, director at Tourism Malaysia. “For January 2009, the destination has received 41,859 Indian arrivals, a 9% increase over the same period last year.”
SriLankan Holidays, the leisure arm of SriLankan Airlines Ltd, has also launched a scheme targeting Indian tourists. It is offering a ticket for the second passenger at Re1 for a three-night-two-day tour of the country, from 1 February to 30 April.
Meanwhile, Australian carrier Qantas Airways Ltd has decided to include a stop at Singapore for flights headed to Sydney, starting May. The airline flies three times a week from Mumbai to Sydney.
“The move will offer connections from India to Sydney, Melbourne, Brisbane, Perth, Adelaide, Cairns and Darwin,” Rob Gurney, Qantas Group’s general manager of sales and distribution, said in a statement.
“In light of the recent economic downturn, we have reviewed our Mumbai services and determined the best option is to operate them via our core hub in Singapore.”
Comment E-mail Print Share
First Published: Mon, Feb 23 2009. 11 37 PM IST