Should SIA stick to luxury to fight LCCs?

Singapore Airlines keeps to luxury image, but at what price?

It has launched a low-cost offshoot this year, Scoot, but is that enough for Singapore Airlines to fight off the LCC competition in Asia? SIA has kept loyally to its luxury image, even as low-cost carriers take away passengers in a weak global economy. Partly as result, SIA’s profits have suffered, the airline posting an unexpected loss in the January-March 2012 quarter – its first since the end of the global financial crisis in 2009. Meanwhile, Singapore Airlines is fighting Emirates for the title of the world’s top luxury carrier.
Singapore Airlines CEO Goh Choon Phong has a choice: stick with luxury to protect a prestigious brand or cut back on the perks to improve profits.
Goh “assumed the mantle at a time when the industry is making a paradigm shift from the extravagance of the past to the economic realities of today” Shukor Yusof, a Singapore-based aviation analyst for Standard & Poor’s, comments. “The strategy or model that SIA has long held needs to be redefined, but to what?”


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