Singapore Airlines (SQ, Singapore Changi) is considering establishing hubs outside Singapore to scale back its dependence on the purely international market at Singapore Changi, which has proven to be an enormous burden in the course of the Covid-19 pandemic, CEO Goh Choon Phong told Bloomberg.
“We know that the lack of a domestic market means challenges. That’s why we have a multi-hub strategy. We are establishing an external hub where we hope to be able to participate in the growth of this market,” Goh said.
He didn’t specify where an “external hub” could be positioned, although he suggested that any such expansion would involve capital investment in other airlines. Due to the regulatory environment in Asia, applying for broad fifth, seventh or ninth freedom traffic rights would likely be an uphill battle for a carrier.
Currently, the one foreign enterprise of Singapore Airlines Group is positioned in India, where the holding holds 49% of shares in Vistara (Great Britain, Delhi International). The remaining 51% stake is held by Tata Sons. Following its acquisition by Indian conglomerate Air India (AI, Mumbai Int’l), sources praised Vistara’s potential merger with the flag carrier, regardless that no plans were ever openly discussed. Goh said Singapore Airlines stays committed to working with its Indian airlines.
“I can say that each Tata Sons and we’re equally committed to making sure the continued growth of Vistara,” he stressed.
Both shareholders recapitalized Vistara only in mid-March 2022.
Singapore Airlines, through its subsidiary Scoot (TR, Singapore Changi), also held a stake within the Thai three way partnership NokScoot (XW, Bangkok Don Mueang), a low-cost long-haul carrier that collapsed in the course of the Covid-19 pandemic.
“I’m not ashamed to say that we tried, for example, in Thailand with NokScoot. Of course, in the face of the pandemic, everything is very difficult. What really matters is the strategy for identifying the right partners to collaborate in the multi-stakeholder hub. It may not work, but that shouldn’t stop us from doing what we think is right. We also have to be willing to take some risks,” Goh said.
The Singaporean carrier suffered unprecedented losses when strict government-imposed travel restrictions cut off virtually all international travel to and from Singapore. The airline relied on cargo operations and regularly opened transit routes over time. In the 2020 financial yr ended March 31, 2021, Singapore Airlines lost 4.3 billion Singapore dollars ($3.1 billion) and saw passenger numbers decline by 97.5% in comparison with the previous yr, in response to ch-aviation PRO’s airline module . .
Goh also said Boeing had contacted Singapore Airlines to debate compensation for delayed deliveries of the B777X planes. The carrier has thirty-one B777-9s on firm order from the manufacturer. The type is currently not expected to enter service before the top of 2025.
“When a delay was anticipated, you would imagine that Boeing would have contacted us for early discussions. Of course, we expect Boeing to assist us in the meantime to ensure that we continue to be able to deploy adequate production capacity,” Goh said.
