SIA’s plans for budget long-haul airline are brave

World watches to see if new airline can feed traffic through Changi

Singapore Airlines will need a steady hand on the joystick if its recently announced plans to create a long-haul budget subsidiary are to work. The world’s second most valuable airline by capitalisation is making an important move and other Asian airlines wait in anticipation to see if it will work. The success of AirAsia X has been built to a great extent on the links between short- and long-haul carriers. What SIA needs is management control over a budget airline that feeds traffic into Changi from airports across Asia, so that passengers in this rapidly growing market can fly long-haul with SIA.
The activities of both AirAsia X and Jetstar, the Qantas low-cost subsidiary rapidly expanding its Changi operations, threaten profits at Singapore Airlines. SIA has to address the low-cost market rather than simply relying on its focus on premium.
The Financial Times


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