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Singapore Air getting squeezed by both luxury and budget rivals

Bloomberg Published on Fri, May 13, 2016 / 11:43 AM GMT+8

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SINGAPORE (May 13): Singapore Airlines Ltd is fighting to prevent travelers from switching to Emirates Airline, which is offering luxuries like on-board shower, while budget carriers are chipping away at the coach class. The result: The lowest yield from passengers in six years.

Yields, or the revenue earned from a passenger for flying a kilometer, was 10.6 cents in the year ended March, dropping from 11.2 cents a year earlier. That damped full-year net income to $804 million, or about a quarter of what Emirates racked up in the same period.

Southeast Asia’s biggest airline by market value is facing increasing challenges to retain customers as the Middle East carriers expand more into the region and about a dozen low-fare offerings seek to win business on short-haul routes from Singapore to resorts like Bali and Phuket. To fight back, Chief Executive Officer Goh Choon Phong, 52, has ordered more than US$10 billion ($13.8 billion) of new aircraft and formed alliances from Australia to India as Asia is poised to become the world’s biggest travel market in two decades.