This morning, I stumbled across an article published on November 23, 1991 about Singapore Airlines in the New York Times, titled “Growing Pains at Singapore Airlines: Carrier’s Expansion is running into Global and Regional Competition.”
After reading it, I experienced a sensation of Déjà vu. It was almost a bit creepy thinking how, despite its 22-year old time stamp, the contents of the article could still be considered relevant and applicable to current times.
The article specifically addressed commercial roadblocks that Singapore Airlines was encountering as it tried to compete in certain countries back then. In Canada, for example, Singapore Airlines was offering a thrice-weekly operation to Toronto from its Singapore base via Vienna and Amsterdam in the early 1990’s. According to the article, that very year in 1991, the Canadian government forced Singapore to shut down its Toronto operations in an effort to protect its national flag carrier, Air Canada, stating that Singapore was walking away with all of the market share and dissuading passengers from flying AC.
To provide further context, here are some clips from the article that struck a chord with me right off the bat.
Growth of global megacarriers, as U.S. and European airlines merge or form alliances to cut costs, will also intensify competition for Singapore Airlines, company officials say.
Rivalry will be especially acute in the high-growth Asia Pacific market as a number of regional airlines improve efficiency while major U.S. and European operators push for greater market share.
The airline is also concerned that the financial troubles of many national carriers will cause governments to drive harder bargains for air traffic rights, based on reciprocity and comparative market size.
Woah.
Let’s pause for a second and recall some events that just happened TODAY, when Singapore Airlines concluded a major chapter in aviation history and retired SIA 021 and 022, the world’s #1 and #2 longest flights, respectively. These services, which operated between Newark Liberty International airport and Singapore Changi International airport, had been in existence since 2004. Singapore announced over a year ago that it would end services on this route, along with its other ultra long-haul nonstop route to LAX, as they were unprofitable and unsustainable given current fuel prices and economic climate.
That milestone came to a close when SIA 22 left Newark at approximately 22:16 local time in EWR on the evening of Saturday, November 23, and landed in Singapore at 05:55 local time this morning, according to Flight Aware.
The flights were operated on Airbus A340-500 series planes, which are four-engined aircraft that have been around for several decades now. These fuel-guzzling jets have largely lost their cost advantage as global airlines have replaced their fleets with newer, more modern and fuel efficient planes. Despite their cost disadvantage, the SIA A340-500s were configured with full lie-flat 30-inch wide all-business class seats, the widest in the airline industry. Premium travelers absolutely loved the nonstop services, as they saved hours of travel and were lauded for their exclusivity, prestige and glamor.
At any rate, in spite the necessity and rationale behind SIA’s decision to end their ultra-long range services, it is still a VERY big transformational adjustment for the carrier and a key, albeit difficult, step in the excruciating battle to stay competitive in the global aviation sphere. SIA will still retain services to Los Angeles and New York on its own metal, but with stoppovers in Tokyo and Frankfurt, respectively.
According to CAPA, now Singapore Airlines will be competing against 20 airlines in the one-stop Singapore-New York market alone, whereas it was the only airline that offered the nonstop option prior to today. It is up against carriers such as Cathay Pacific, which will soon offer up to 5 daily flights between Hong Kong and the New York City area, of which several are well-timed to connect onward to Singapore in HKG. Cathay has three services operating nonstop to JFK airport, one that flies direct via Vancouver, and a fifth one that will open up a new station at Newark airport in coming months.
Elsewhere, Singapore Airlines will also now have to compete against Emirates Airline of Dubai, another mega power-player that can funnel traffic over its global hub in Dubai. Emirates flies two daily Airbus A380’s on its services to New York JFK, each which carry over 500 passengers.
Returning to the historical article, it’s crazy to think how even in the early 1990’s, when times were roaring, Singapore Airlines even then felt the competitive heat in the global aviation sphere.
What’s weird is that its withdrawal from the ultra long-haul space reflect the same dynamics, even though the aviation world has changed SO much in just 5 years, let alone 22.
Just pause and think about this for a second. Imagine how much has occured since 1991:
Perhaps the biggest ticket item that comes to mind is that this article predated 9/11. Every single country, airline, airport and operator involved in commercial air transport has been affected by the events of September 11, 2001, indirectly or directly.
Following that, the biggest economic meltdown the world has ever experienced, not to mention numerous other economic crises or fluctuations, such as Asia in the late ’90s, the dot com bubble burst, the Eurozone fallouts
The devastating natural disasters and deadly ailments that have struck the Asia-Pacific region in the face, such as the Tsunami, SARS, H1N1 and the Japanese earthquake, plauging airlines in their wake
The formation of the European Union and the rise of the important BRIC countries
This article was also before the rise of Middle Eastern giant carriers, Etihad Airways, Emirates Airline and Qatar Airways, which have each single-handley transformed the future of global aviation forever.
This article was also published during a time when carriers like Pan Am and TWA were still common household names.
Back then, tickets were booked via travel agents and call centers and not on the internet. Airlines still had big city ticket office (CTOs) that people visited to purchase trips.
Back then, airline tickets were paper-based, not even electronic, and couldn’t be downloaded and used for departure control on mobile devices and handsets.
This article was published hefore anyone had even thought about inventing this huge global brand that would eventually include a chain of airlines banded together in what is now called the Star Alliance. American Airlines and Lufthansa were partners.
This article was published back when airlines were still flying MD-11s, DC-10s, Boeing 747-200s and Airbus A300s. And, most of all, the Concorde.
The article predates the birth of low-cost budget carriers such as AirAsia, and the thought of a long-haul, low-cost carrier such as Jetstar, AirAsia X and Scoot could succeed without generating hoots of laughter from a Boardroom of Executives.
This article was published at a time when fuel was probably costing airlines $15-20 per barrel instead of $90-100 plus.
It’s just truly amazing to recognize that while we often think that airlines used to have it so good, it really comes to show that they’ve been dealing with politics, drama and problems all along, even when times were seemingly better.
What we’re seeing in 2013 is still very representative of what was happening in 1991, according to the article. Perhaps with a few adjustments here and there.
For one, we know that the Asia-Pacific market continues to be an exceptionally high-growth market, despite all of the numerous challenges the region poses. At the moment, we’re dealing with a depreciated Yen, a typhoon that just ravaged the Philippines, and a spat between Qantas and Virgin Australia.
Yet, everyone and their uncle still wants to figure out how to make Asia work.
For another, we’re watching airlines continue to merge and form alliances and joint ventures to cut costs. LAN + TAM. American + US Airways. Delta + Virgin Atlantic. Avianca + TACA. Qantas + Emirates. Etihad + Every Airline Everywhere (only half kidding here).
OneWorld seems to be on the rise, acquiring more powerful players and remaining more open towards the concept of pursuing extramarital relationships aside from individual carrier members.
Star is not only losing important players, but also facing the threat of an identity crisis without any new potential entrants in the pipeline, and growing fragmentation between the high-growth, prosperous airlines (such as Turkish, Ethiopian and COPA) vs. slower, more sluggish carriers (Lufthansa, Air Canada and Air China) and the ones that are or are trying to avoid teetering over the edge (South African, United and SAS).
SkyTeam is perhaps the most lopsided and laissez-faire, with a questionable participants such as Aerolineas Argentinas, Saudia and TAROM, who contribute minimal overall value. SkyTeam’s strengths primarily lie in China and North Asia, but the alliance as a whole has been unable to leverage that presence to demonstrate to the world how much it can truly dominate the region, like Star has been able to do in Germany and OneWorld in the UK.
Finally, the financial troubles of the airlines these days are endless.
Maybe, in an strange way, all of these things taken together, for better or worse, are what makes the industry so fascinating, challenging, infuriating in rewarding to watch and appreciate, all at the same time.
