SINGAPORE: The importance of Singapore Airlines’ (SIA) premium brand can be seen through the promotional events it sponsors to attract foreign tourists to Singapore, such as the F1 Grand Prix.
This premium brand perception is formed in the minds of SIA passengers thanks to the airline’s safety record, the interior cabin of its planes, the uniforms of its crew, the menu selection, the service. meals, in-flight entertainment, in-flight announcements and overall quality of service.
The COVID-19 pandemic has unfortunately hampered the opportunities that passengers might have to take advantage of SIA’s world-class offerings, as air travel has been primarily disrupted and, more recently, limited to business travel.
In this context, SIA has recently attempted to bring selective offers from airlines to passengers even if they cannot currently travel.
EAT IN STYLE
Three initiatives it launched in this regard were the opportunity to have lunch on board an Airbus A-380 jumbo jet (Restaurant A380 @ Changi), home deliveries of meals from its first class menus and business class as well as a tour of the SIA training facilities.
Some of them have met mixed reactions, especially the prices of its onboard and home delivery options.
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For example, the airline offered exclusive first-class meals for home deliveries at S $ 498. It has been criticized online as being elitist and out of touch with “the realities on the ground”, especially in these difficult times when job and income loss is common.
From SIA’s perspective, these in-flight and delivered meals are a critical part of the airline’s marketing strategy targeting the premium air passenger market. The strategy keeps SIA’s image as a premium airline alive in the minds of the public when the skies are almost out of bounds.
The strategy seemed to work as the 900 seats available for the A380 @ Changi restaurant were sold within 30 minutes of opening reservations on Monday, October 12.
KEEPING PREMIUM AT ITS HEART
This shows why the premium segment of air travelers is important for full service airlines such as SIA. Efforts to cultivate this market are crucial, especially during the pandemic with border closures and reduced flights.
So efforts like the A380 @ Changi restaurant to help brand loyalty and retention are important to SIA because it is a market and an identity that it cannot lose sight of.
For SIA, even the emergence of low cost carriers (LCCs) over the years has not required it to dilute the premium SIA brand to compete with this new competition, as several other full service carriers have ( FSC).
North American FSCs, such as American Airlines, Delta Air Lines, and United Airlines, have started unbundling ancillary services on their flights to charge segmented fares beyond seat fees as a strategy to compete with LCCs.
This strategy also created ancillary revenue streams generated for items such as baggage fees, additional legroom products, and food and beverages.
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Other FSCs such as British Airways, Air France, KLM, Lufthansa and Alitalia have offered Hand Baggage Only (HBO) fares on their North Atlantic routes.
Instead, SIA chose to create another brand called Scoot to deal with LCCs while preventing cannibalization of SIA’s premium brand.
MAINTAIN A PREMIUM BRAND
The importance of premium passengers for SIA is even more visible during the current recession, as employers and businesses tighten up on business travel, shrinking the premium passenger market for airlines.
“With the proliferation of Zoom meetings and most of the company’s employees working remotely, business travel in particular has been sharply reduced in 2020,” a recent report from Investopedia said, citing a study by Trondent Development. Corporation.
The same report reveals that although business travelers make up 12 percent of air passengers, they typically provide double the amount of profitability with their revenue contribution of up to 75 percent for some flights.
In line with these trends, most FSCs are likely to improve their economy and premium classes, perhaps even cut back on their first class offerings, and allow them to be more widely available to bridge the travel gap. business and economical travel.
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To keep pace with changing market demands, SIA has downsized its first-class cabins to single-row seats on its latest Boeing 777-300ER and allocated more resources to developing seating capacity for the market segment of the business class.
AHEAD OF THE PACK
While some airlines have chosen to compromise on their premium branding, SIA is unlikely to abandon this strategy, even though it is relatively expensive and requires significant investment, careful management and implementation. detailed programs.
Since its launch in 1972, SIA has succeeded in creating and projecting a high-end brand identity.
Its strategy has been based on innovation, using cutting edge technology, genuine quality and excellent customer service, as it has pioneered services such as meal options, free alcoholic and non-alcoholic drinks, headphones. complimentary, hot scented towels, personal entertainment systems and video. on demand in all its flight cabins.
SIA further differentiates its branded experience with various in-flight perks such as Book the Cook, in which premium passengers can choose their favorite gourmet main course from a selection of dishes prepared by the airline’s International Culinary Panel prior to their trip. flight.
In addition, SIA’s menus are also specially created to reflect the culinary influences of the regions to which it flies. Other perks include the availability of Air certified sommeliers to advise passengers on the art of food and wine pairing.
PREMIUM TRAVEL ALLURE
SIA is also strengthening its premium brand image through a strong loyalty component.
The first class market segment has a strong loyalty component for some airlines like SIA, and the first class appeal is used by SIA as an opportunity to move from business class.
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As part of its marketing strategy as well as to build customer loyalty and reduce attrition, SIA is leveraging this ambitious aspect of premium travel, as its frequent travelers can use the miles to access premium long-haul cabin seats. .
SIA also makes extensive use of a “waiting list” in which passengers express their interest in upgrading to travel class and the airline can selectively approve the request of individual passengers, regardless of the order of the list. ‘waiting.
This balances revenue management with a measure of passenger value. The airline decides who should be rewarded.
SIA is unlikely to be disconnected or disconnected from its targeted premium market as an airline. SIA started out as a branded product entirely focused on the premium travel market and continues that business model until today.
A PROFITABLE ENTITY FIRST OF ALL
Although many see it as the national airline because it is majority owned by Temasek Holdings, its basic premise is to be a self-sustaining and revenue-generating entity for its shareholders. The high-end segment is where most of the revenue comes from.
Its promotion of high-end branding may attract criticism as it appears to favor the wealthy.
Despite criticism, the premium brand SIA must be supported and strengthened because, after COVID-19, the airline will be a vital tool that would facilitate the recovery of the aviation sector and maintain Singapore’s air connectivity through Singapore Airport. Changi.
Singapore’s aerospace hub strategy requires an AIS capable of not only maintaining its premium brand image, but also keeping intact its core capabilities essential for the recovery of related industries and the economy as a whole.
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SIA’s contribution to the nation is far more than the amount of food it sells in flight. He should be measured by the number of Singapore tables he puts food on.
Dr Faizal Yahya is Principal Investigator at the Institute of Policy Studies, Lee Kuan Yew School of Public Policy, National University of Singapore.