News

United’s non-stop SFO–SIN flights bad news for SIA

2 Feb 2016 by Clement Huang
While travellers may rejoice about United’s upcoming non-stop service between San Francisco and Singapore in June 2016 (see here), the announcement could spell problems for Singapore Airlines (SIA). SIA discontinued its A340 direct services to Los Angeles and Newark in 2013. Now, all US-bound flights require a layover – typically through Hong Kong, Tokyo Narita or Seoul Incheon. The new direct link by United is sure to test the resolve of even SIAs most loyal patrons. After all, the Singapore carrier’s flights to San Francisco are a minimum of 17 hours, 10 minutes, whereas United’s direct service will be nearly two hours shorter. The situation is further compounded by the fact that both United and SIA are members of Star Alliance, meaning members of SIA’s Krisflyer frequent flyer programme will be able to enjoy mileage accrual and redemption opportunities by flying with the US carrier. Bear in mind that most of United’s fare classes – even those that are discounted – offer a 100 per cent accrual level for the Krisflyer programme. Moreover, the two carriers have never had a history of codesharing with each other, and so far there have been no plans for that to change, meaning SIA will not even be able to benefit from partnering with United on the new San Francisco­–Singapore service. Can SIA's strong brand image and loyalty overcome incoming pressures from United's nonstop links to the US? Long-haul routes have been a notoriously tricky business for SIA, having been "almost consistently loss-making since 2009 as its competitors have refined their strategies and successfully established themselves in SIA’s markets", reported Yahoo Finance last year. While SIA's overall business remains profitable, the incoming threat by United could see it lose even more long-haul market share to the US carrier. SIA has announced its intentions on resuming non-stop services to the US (see here) – having recruited Airbus to develop an ultra-long-range variant of its A350 – but this will not become a reality until 2018 at the earliest. United will therefore begin its direct links at least two years earlier. For more information, visit singaporeair.com and united.com Clement Huang
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