Competition heats up for Singapore Airlines as Middle-Eastern carriers expand presence

SIA increases frequency of flights to Australia.

Eithad Airways announced earlier this month that it will commence daily flights between Abu Dhabi and Brisbane via Singapore. OCBC notes that this move by the national airline of the UAE highlights the increase in competition amongst premium airlines for market share in the growing Australia/Asia-Pacific region.

SIA has responded to this move, said OCBC, by increasing the frequency of flights to Adelaide and Melbourne (commencing 31 March), which brings the total number of flights to Australia by the Group to 133/week (124/week previously).

OCBC mentioned with increased competition among premium airlines, unless management starts to look for other growth opportunities for the Group, SIA may find itself in an unenviable position with pricing as its only tool to stimulate top-line growth going forward.

"SIA needs to seek out strategic investments in order to keep pace with its competitors. In recent times, airlines such as the Middle- Eastern carriers have been aggressively seeking collaborations with other airlines via joint ventures/direct investments in a bid to grow their revenue base and expand its reach. On the other hand, SIA recently concluded its unprofitable venture with Virgin Atlantic and was late into the game with its 10% stake in Virgin Australia. With a sizeable war chest, SIA has to turn more active if it wishes to remain relevant at this stage."

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