Free wine endangered on Asian airlines after OPEC accord

SYDNEY (Dec 6): Some of Asia’s marquee airlines that spoil passengers with free alcohol and in-flight entertainment may soon have to kick the habit.

The on-board giveaways, famously rolled out to every passenger in the 1970s by Singapore Airlines, will be unsustainable for some carriers after OPEC’s production cuts announced last week drive up the cost of fuel, according to aviation analysts. Other options include cutting unprofitable routes, retiring gas-guzzling aircraft and raising fares.

The deal reached by the Organization of Petroleum Exporting Countries on Nov 30 couldn’t have come at a worse time for carriers such as Cathay Pacific Airways and Singapore Air that are battling excess capacity and declining premium traffic. Asian operators are also particularly vulnerable to rising fuel costs as their profit margins are about half those of their North American peers after competition pushed down fares.

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