Homepage
PR Newswire
Several problems with SIA.
For the starter, SIA has too strong a pilot union so that it can't cut cost deep enough when the business is going down. Airline business is not exactly a growing business, especial for the customer segments SIA served. There will always be difficult time for SIA. You will lose for sure when everyone else is cutting cost during the down time, but you can't.
Second, airline market is not a free market. There are too many players with state aid behind, which does not aim for profit, specifically, the gulf carriers and MAS. And unlike the US carriers, SIA does not have a domestic market to protect itself from competitions. This leads to the third point.
Third, SIA should invest into Changi airport during the good times when it earned quite a lot of money. Instead, it pays too much dividends. Without SIA, it would be hard to imagine that Changi airport can be this successful. But SIA did not capitalize on it. If SIA has invested into Changi airpot, not only it could be compensated for part of the rising operating cost from Singapore, but prosper with the growing outlook with Changi Airport as Singapore is still a preferred destination within the ASEAN.
It is hard to imagine that SIA can return to its glory days, except in a few good years. SIA is now more like a utility(runoff) and a cyclical investment.
For the starter, SIA has too strong a pilot union so that it can't cut cost deep enough when the business is going down. Airline business is not exactly a growing business, especial for the customer segments SIA served. There will always be difficult time for SIA. You will lose for sure when everyone else is cutting cost during the down time, but you can't.
Second, airline market is not a free market. There are too many players with state aid behind, which does not aim for profit, specifically, the gulf carriers and MAS. And unlike the US carriers, SIA does not have a domestic market to protect itself from competitions. This leads to the third point.
Third, SIA should invest into Changi airport during the good times when it earned quite a lot of money. Instead, it pays too much dividends. Without SIA, it would be hard to imagine that Changi airport can be this successful. But SIA did not capitalize on it. If SIA has invested into Changi airpot, not only it could be compensated for part of the rising operating cost from Singapore, but prosper with the growing outlook with Changi Airport as Singapore is still a preferred destination within the ASEAN.
It is hard to imagine that SIA can return to its glory days, except in a few good years. SIA is now more like a utility(runoff) and a cyclical investment.