We are keeping an open mind on Air India, says Singapore Airlines’ India chief

New Delhi, March 18, 2018: Singapore Airlines (SIA) has a long history in the Indian aviation scene. The airline started operations from Chennai in 1970, and since then, its interest in the Indian market has gradually grown. Nearly four years ago, SIA tied up with conglomerate Tata Group to start full-service carrier Vistara.

Of late, SIA is in news again after showing interest in national carrier Air India, which will be up for sale soon. The government’s decision to allow 49 per cent foreign direct investment in Air India has opened doors for SIA to look for an Indian ally – which most likely will be Tata Group – to snap up Air India in some form and shape. In a conversation with Business Today’s Manu Kaushik, SIA’s general manager for India David Lim said that the airline has not closed the door on Air India yet. Here are edited excerpts from the interview:

 Q. What are the latest developments at Singapore Airlines?

David Lim: We have just announced our quarterly results. It looks really good. The net profits and operating profits have increased because revenues have increased more than the expenditure. Even though the fuel prices have increased, we have managed to grow our revenues much more.

We are excited to take delivery of the new Airbus A380 a few months ago, and we have built a new product that includes suites, business class, premium economy and economy class. It’s one of the best in the industry. By the end of this month, we are going to take delivery of Dreamliner (Boeing 787-10). It’s different from 787-8 and 787-9. It’s a longer version. With that, we will unveil a new product.

Dreamliner will be a medium-haul business class product. It will be flying on routes [with a flight duration of up to] 7 hours that would include India. We have ordered 49 Dreamliners. They are meant for growth as well as to replace some of our existing fleets such as A330 and Boeing 777.

Dreamliner and A350-900 are new generation aircraft which are lighter and more fuel efficient. We use A350 for the long-haul. We already have 21 A350s.

Q. Where does India fit into the global strategy of Singapore Airlines?

David Lim: India is an important market. We started our first flight to India (Chennai) nearly 48 years ago. Today, we are flying to 14 cities from Singapore under SIA and Scoot brands. Excluding Scoot, we have 98 weekly services currently. In the coming summer, we are adding new flights. We will have 104 weekly services.

We are adding more flights from Coimbatore, Trivandrum, Mumbai, Kochi, Ahmedabad, and Hyderabad. We want to increase the flights as far as possible, but in some cities like Chennai, we cannot grow anymore because we have reached our entitlements. We have about 25,000 weekly capacities under bilaterals.

Q. What’s going on with Air India?

David Lim: We are keeping an open mind on the bidding process for Air India. We have not closed the door yet.

Q. Are you going to be participating in Air India’s bidding?

David Lim: I really don’t know. It really depends when the [bidding] document is published and everybody will see if it’s of sufficient value. Then whoever has the resource will have to show that they want to own it.

Q. Most players are interested in the international side of the business?

David Lim: There are so many speculations. I guess the seller wants to have more interest. Air India is a national asset. Every Indian has some pride in the airline.

Q. What’s been your experience with Vistara so far?

David Lim: Vistara is over three years old. By this month, they are going to receive their 20th aircraft. They have the ambition to expand globally. They are growing as planned. Whether they are making money, that’s the question you have to ask Vistara. Over the three years, they have found a niche. The perception of Vistara in Indian market is good. Everyone knows that Vistara is a quality airline. They have good products and services. That reflects the philosophy of the owners – both Tata Group and SIA. They have not let us down.

Q. Do you take into account the Vistara’s network when you plan SIA’s India network?

David Lim: We treat Vistara as a separate airline. We code-share with them as far as possible.

Q. What kind of passenger load factors (PLFs) you are registering on the India network?

David Lim: I cannot share India-specific numbers. We are running at 81.2 percent PLF, system-wide. Prior to that, we had 79 percent PLF. One of the reasons that our revenues have increased is due to higher PLF. To increase the PLF, we have taken a lot more commercial initiatives – promotions etc – that have stimulated the market according to businesstoday.in.

Q. What are your typical services between India and Singapore?

David Lim: It’s a mix of both. We don’t fly customers from point to point. We do satisfy the customers’ needs to fly to other places. India has links to other countries. If you want to go to Perth (Australia), there’s no India to Perth direct flight. The customers have to use other ways to go to Perth. Singapore hub is very attractive. We do have such traffic. There are a lot of Indians that just visit Singapore.

When Singapore Tourism Board unveiled numbers for 2017, India was the third largest source market for Singapore, overtaking Malaysia. The inbound traffic growth rate from India is 16 percent.

Q. Are you pushing for more bilateral seats from India?

David Lim: We will use what we have as far as we can. Currently, 90-odd percent of the bilaterals [from our side] are being used. We are seeing Indian carriers also increasing their flights to Singapore. Air India Express is flying from more points. IndiGo, Air India and Jet Airways have increased their flights. Air India Express has started services from Madurai to Singapore. The Indian carriers are getting more interested in Singapore because they also see that many Indians are going to Singapore.

Q. What percentage of India’s share of the bilaterals is being used presently?

David Lim: It’s nearly 80 percent. The Indian carriers don’t fly to Malaysia and Vietnam but many Indian carriers are flying to Singapore.

Q. Because of the geographical location of Singapore, do you think the scope of growth for SIA is getting limited? The middle-eastern airlines are at an advantageous location to connect with the western countries.

David Lim: There’s a huge demand for East. For West, I cannot participate in the growth. But it is East which is seeing quite good growth. Singapore Tourism Board has been announcing high Indian visitors to Singapore year after year. This is the third year that the Indian visitors to Singapore have crossed the one million mark. Malaysia is also announcing a large number of Indians coming to their country. In fact, Australia had a vision of 300,000 Indian visitors to Australia by 2020. But they have already met the target in 2017. New Zealand is also recording a high

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