By Tan Bah Bah
The last time I flew on Singapore Airlines was in the mid-1990s. I won a prize as the 5,000th user of a credit card at a noodle restaurant in Centrepoint. I had to pose and smile for a picture for an in-house magazine before I was given two Raffles Class tickets to Bangkok, with two days first class stay at a five-star hotel.
I had absolutely no idea what the whole package cost. It must have been a fortune. Needless to say, I had a great time flying to and lapping up the delights of Thailand. But I have to confess I have not been on any SIA flight since. It was any other airlines – Qantas, United Airways, Northwest, Jetstar, Malindo, Cebu Pacific – because they were cheaper. And anyway, especially nowadays, because I do not travel to any destination beyond a couple of hours away, it has always been budget airlines for me. Strangely, I have never flown SilkAir, Scoot or Tiger, the three SIA subsidiaries.
All this is my way of saying that SIA has been on a journey of becoming less relevant as a must-fly airline for some time. There are others in the game now and travel habits have been evolving because of the competition and new technology.
The late Lee Kuan Yew once said he was prepared to do anything to retain Changi Airport to make it succeed because the airport was a lifeline of the Singapore economy. If no one comes or passes through here, we all can say goodbye to the island, that was what he was saying. But he also said he was more than ready to close down SIA if it proved costly or impossible to operate. He was then trying to get airline pilots to cooperate with the management over pay and perks.
That closing down scenario is not exactly far-fetched today, not entirely for the reason of getting national priorities straight. It is more for other reasons.
Is SIA a bloated company and/or airline? The Straits Times reported that of the SIA group’s operating profit for the financial year ending March, 30 per cent came from SilkAir, Tiger and Scoot, compared to only 20 per cent the year before. So it was showing less and less profit. Overall for January to March this year, SIA saw a loss of $138 million, its first quarterly loss in five years.
There is an attempt in the mainstream media to paint a picture of SIA being nimble and on top of the situation. Other competing airlines are worse off because they have not responded fast enough and have spun off into budget travel, seems to be the general thrust of the stories. So what if Cathay Pacific is still stuck in a rut? What has that got to do with SIA?
The truth is that times have been changing for some time and others have already caught up. What has the SIA management been doing all these years?
Why is the management only now beginning to talk about reviewing all options to ensure long-term viability? The so-called Transformation Office (just set up?) will do the review, CEO Goh Choon Phong said. The transformation should have taken place eons ago!
Look at what happened to Neptune Orient Lines, the national shipping line. In its best years in the 1970s, it acquired APL for US$825 million. By 1988, it lost US$460 million and racked up a debt of US$4 billion, repeat, $4 billion. Finally, in 2016, it was sold to France’s CMA CGM which later delisted it from the Singapore Exchange.
Part of the answer to SIA’s future and perhaps Changi’s too may lie in a scenario sketched out by Ho Kwon Ping in his speech as the Institute of Policy Studies’ S.R. Nathan Fellow for the Study of Singapore in 2014.
The prominent businessman and SMU chairman asked: “Is our hub status declining into irrelevance as global trends create new hubs or even render the whole notion obsolete? … Massive investments in rail and road networks will allow every part of China to access ports in the Indian Ocean or carry cargo to Russia and Central Asia to Europe directly without passing through the Straits of Malacca… the rise of Middle Eastern airports and airlines has siphoned much of the so-called kangaroo route between the UK and Australia and the rise of numerous world-class airports in China has resulted in direct flights between the rest of the world and Chinese cities bypassing Singapore.”
He offered a number of options for survival. If we worked on the advantages of being a pioneer aviation hub – leasing, financing, avionics, technical skills, precision engineering, digital technologies, which will enhance the airline’s capability – we should continue to be relevant.
SIA will have to totally re-earn its keep. Being No 1 or 2 in the aviation consumer world may give the airline some bragging rights. But, ultimately, the only way to fly is to do it profitably, whatever it takes.
SOTA’s ugly response to student’s gracious tribute to ex-teachers
Student Calleen Koh’s gesture was beautiful. Contrast that with the pettiness shown by SOTA in removing her impromptu installation meant to pay heartfelt tribute to teachers who have left the school.
Yes, there are rules and rules. But just use your brain and judgement, that’s what being educated is all about. Here’s one of your students, in a school of the arts of all places, exercising her creative urge to do something meaningful. Instead of praising her, you get defensive, start clarifying that there has been no unusual number of teacher resignations – and promptly remove the piece of art to ram home your point. How ungracious and ugly.
Sense And Nonsense is a weekly series. Tan Bah Bah is a former senior leader writer with The Straits Times. He was also managing editor of a local magazine publishing company.