SQ is considering on cancelling the A380 orders

[KC Sim 2]

mdrudy: I hope you have been tracking the public statements made by SIA and if you have done so, you will realise that much of the talk about cancelling the A380 order has not come from the airline. A lot of it was based on speculations and editorial comments by the media. SIA has just gone on to convert nine of its 15 options to firm order and now has a total of 19 A380s on order.

 

While the B744s are still in the fleet, many of them were committed to airlines such as Dragonair Cargo, Martinair and SIA Cargo for passenger-to-freighter conversion and have actually left the fleet - resulting in a capacity shortfall this winter. Try booking on SIA's flights to many destinations and you will see how incredibly full the flights are.

 

The idea of replacing existing B773ER on some B744 routes is not about matching seat for seat but more about right-sizing the aircraft to match the upper end of the yield in each market. With the B773ER, SIA is able to command a higher return on each passenger flown and yet enjoy the superior economics of this aircraft. With the periodic upgrade of service delivery, SIA is quite happy to live with lower capacity that is fully utilised throughout the year than mop up everything (including yield that is rock-bottom) and then face poor load factor during some months.

 

Securing the best possible price for future orders is something every airline should strive for . . . unless that airline's decision-makers have other compelling (and perhaps personal) reasons for wanting a higher purchase price. Did you think that airlines like MAS, Thai, Qantas, Emirates, China Southern, Etihad, Qatar and even Kingfisher did not fish for compensation? Actually, the delay comes as a godsend for some of these airlines which probably did not require the A380's capacity that soon. Being able to pressure manufacturers for the best price and highest compensation is not something any and every airline can lay claim to . . . SIA, Qantas and Emirates have each earned that right.

 

During the delivery ceremony of the B777-300ER in Seattle on 28 November 2006, Boeing Commercial Aircraft's CEO noted that since October 1972 when SIA came into being (after the split of Malaysia-Singapore Airlines), SIA has acquired a total of 211 Boeing aircraft. Except for some B707s and the B727/757s, the rest are all widebodied jets. SIA has never cancelled a single Boeing aircraft ordered and exercised most of its options. It has earned the right to negotiate better prices for future aircraft - and does not need the cheap tactics and threats of cancellation for that.

 

KC Sim

[Md. Rudy 0]

Hi KC Sim,

 

Yes i have been following the news & aware of the new orders for A380. You were right in most of your statement. However, in the SIA camp we knew that SIA would not cancel the A380 since B744 need replacement. The speculation of cancelation may not come directy from SIA but is used wisely by SIA. SIA never deny nor agree to those news but use it at bargaining table.

 

SIA only buys at heavily discounted price even that if that means delaying the order. Good example would be the 787 & A350 order. As far as Boeing & Airbus is concerned, securing SQ order is a good publicity than securing order than other airlines. Also, other airlines may not be at SQ bargaining position due to their order size & fleet replacement policy.

 

You are right about 777-300ER. Simply commenting on some forumer that think SQ can replace A380 for 777-300ER.

For B744 sale to other airlines, SQ has been negotiating to delay the sale but i'm not sure about the outcome. Other measures like delay in phasing out older 777 were among step taken from the day one Airbus delay the A380.

 

Current capacity dropped in winter is actually mainly due to 777 fleetwide RR engine inspection, not A380 delay or B744 leaving the fleet which something unexpected. Some routes were taken over B744 like AMS on ad-hoc basis causing capacity issue, not only to 777 routes but B744 as well. Some B744 planes got so many yellow stickers in the cockpit (showing unserviseable equipments) because SIAEC couldn't attend to it due 777 inspection.

 

 

 

 

 

 

[Sandeep G 1]

Interesting conversation here.

 

An odd question for you guys, albeit appearing slightly out of tune due to personal fatigue

 

The marketing department are the ones who actually do aircraft orders right? And so whatever happens, that's why the negotiations continue to get good deals and extras... if flight ops or engineering were to have a significant say in aircraft orders - what do you think would happen in a situation like the A380 delay experienced presently??