Yesterday I wrote about Singapore Airlines’ precipitous drop in profits. One more, albeit smaller, reason for the decline: lackluster demand for premium economy seats at a premium price.
Singapore recently resumed “ultra-longhaul” flights from Los Angeles and Newark. The carrier also serves San Francisco nonstop and will start service to Seattle next year. All of these flights except Seattle operate using specially-configured A350-900ULRs featuring only 67 seats in business class and 94 seats in premium economy class.
While Singapore is having no trouble selling its business class seat, it is struggling to sell the premium economy seats, at least a prices that command a premium over the competition. For example, fly from New York to Singapore and you can expect to pay the same price for premium economy on Cathay Pacific via Hong Kong as the nonstop flight on Singapore Airlines. At this moment, Singapore Airlines has not been successful in charging a premium for the nonstop flight. The goal is at least a 20% premium. Right now, you can still score round-trip tickets from New York to Singapore during the peak holiday travel period for $1,230.17 round-trip.
Singapore Airlines Executive Vice President Commercial Mak Swee is very diplomatic in explaining that some travelers are not “entirely familiar” with the product, thinking that it is simply economy class with extra legroom. And while the Premium Economy seat is far closer to economy class than business class, it does offer significantly better legroom, recline, and enhanced service and meals onboard.
When Singapore last attempted nonstop flights between Singapore and Newark/Los Angeles, it used A340-500s. Initially, those aircraft featured a mix of business class and premium economy (then called “Executive economy”), but later switched to all business class. This time, Singapore hopes it has struck the right balance between business and premium economy.
I’ve done my fair share of ultra-longhaul flights and prefer them to connections that break up the trip but add to overall travel time. Even so, I would never go out of my way to fly such a long flight in premium economy. Since I cannot sleep in these seats, I’d just as soon break up the trip if I was unable to upgrade.
image: Singapore Airlines