Aviation, tourism and energy writer for the Business Herald

Cost-cutting Singapore to keep NZ links

Airline says it is profitable despite high fuel costs and is committed to services here.

Subhas Menon said the Asian market continued to be robust. Photo / Supplied
Subhas Menon said the Asian market continued to be robust. Photo / Supplied

Singapore Airlines is cutting some routes and continues to trim costs but says it remains committed to New Zealand.

The airline's regional vice-president South-West Pacific, Subhas Menon, said the airline faced high fuel costs but continued to make profits and would continue to be a long-term player in this country where it began services in 1976.

The airline cut services to Athens last year and later this year will quit the ultra-longhaul Singapore-New York route. It has cut allowances for crew staying overnight in cities around the world, including New Zealand.

Earlier this year the airline offered captains voluntary no-pay leave.

Menon said cutting remuneration was never easy.

"We have a very open relationship with staff. We've taken them through it," he said during a visit to Auckland.

At the height of the global financial crisis all of Singapore Airlines' staff took a pay cut ranging from 5 per cent to 20 per cent for its chief executive.

He said the airline was committed to the full-service model and would unveil a revamp of its aircraft later this year.

A new range of products was launched five years ago to coincide with the introduction of Airbus A380s and Boeing 777-300s and new products were determined after surveys of passengers.

"Nobody wants showers and bowling alleys, they want a lot more comfort, sleeping comfort and ambience. Premium customers like to be served."

Passengers were more health conscious and this would be reflected in new menus, said Menon.

During the peak season the airline flies from Auckland to Singapore twice a day and throughout the year flies daily from Christchurch.

He said the Auckland market was strong and growing although there were no plans to increase services.

"At the moment we don't have any definite plans but it's something we always look at. We are here to stay, we want to keep investing."

Singapore Airlines' last quarterly profit was US$142 million ($169 million), a 5.4 per cent increase on the previous period but less than analysts estimated.

Menon said the Asian market continued to be robust, where airlines were coping with growing competition from Middle Eastern rivals.

"Middle Eastern carriers serve the European market and they've been our competitors for quite a while now - it's not something new.

"We think Europe is waning and the growth is mainly in Asia and we are well placed," he said.

- NZ Herald

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