Changi versus Dubai; SIA versus Emirates: Who dares win

MAC PATEL
Hub Development
Both Singapore and Dubai governments have pursued an Open Skies policy to further develop their hubs. As a result of Emirates' aggressive expansion plans, Singapore Airlines has most to lose.

For example, Emirates is already flying non-stop from Sydney to Dubai, thereby cutting out Singapore as a transit stopover point and providing a faster and convenient routing to Europe with one-stop service rather than two stops.

This is possible thanks to the ultra-long haul aircraft, such as the Airbus A340-500s, which have become an aircraft of choice for airlines wishing to provide "ultra longhaul, nonstop point-to-point services" (i.e Sydney to Dubai and Singapore to Los Angeles).

Emirates' strategy of creating Dubai International Airport as a hub makes sense in that it allows the carrier to fly passengers from the Asia Pacific region into Dubai and provide connections to primary and secondary destinations in UK/Europe.

For example, if a traveller wants to fly from Sydney to Birmingham, he or she would take the nonstop Sydney to Dubai flight and then connect onwards from Dubai to Birmingham.

This omits the necessary transfers at busy airports such as London Heathrow where congestion can often result in lenghty delays and inconvenient transfers between
terminals.

Given Dubai's strategic location and visionary government, coupled with
technological advances in aircraft manufacturing, Emirates has flourished faster than anyone, including Singapore, had anticipated.

Low-Cost Airlines
Dubai is fast emerging as the 21st Century global airline hub, while Singapore is faced with an increased challenge from the rapid emergence of low-cost airlines in the South-East Asian corridor.

The Singapore government has had very little choice but to find a quick solution to the problem of a high operating cost structure at the airport. Proposals have included building a dedicated passenger terminal at Changi Airport for use by low-cost carriers, at least two of which are due to be launched in the city state mid-2004.

The low-cost airline terminal would provide limited amenities and passenger service charges would be lower.

Meeting the Challenge
Singapore Airlines recently announced that it would launch a low-fare carrier called Tiger Airways in the second half of 2004 in partnership with investors from the USA and Europe.

Another new Singapore-based airline, ValuAir, is meanwhile planning to launch services in the first half of 2004, while Malaysian low-fare carrier AirAsia has looked at serving Changi while also considering starting an associate airline in Singapore with local partners.

AirAsia has said that Changi Airport's user charges are currently too high to justify
operations.

Ownership
Emirates is owned 100 percent by the Government of Dubai whereas Singapore Airlines Group is 56.76 percent owned by the Singapore Government controlled company, Tamasek Holdings (Private) Limited.

Frequent Flyer Programme & Airline Alliance
Both airlines participate in each other's frequent flyer programmes, however Emirates is still not convinced about joining a major global alliance.

The SQ-EK relationship only goes as far as members being able to "earn and burn miles" on each other carrier's flights.

What is surprising is the fact that members of Singapore Airlines' Krisflyer are not able to redeem their miles on Emirates' Sydney/ Brisbane/Melbourne to Auckland services.

No one at Krisflyer service centre was able to explain why this might be the case but one might assume that Air New Zealand has put pressure on Singapore Airlines through the Star Alliance management board to inhibit its participation on these specific routes operated by Emirates.

With ongoing speculation about Emirates' alliance strategy, the airline's president, Tim Clarke, has made it clear that it's corporate strategy is to develop relationships based on code-sharing agreements with various airlines, the most recent being with Royal Air Maroc, Finnair and Continental Airlines.

Network & Growth
Emirates' biggest advantage is that it has a large network in the UK/Europe (19 cities: Athens, Birmingham, Dusseldorf, Frankfurt, Glasgow, Istanbul, Larnaca, London Gatwick, London Heathrow, Malta, Manchester, Milan, Moscow, Munich, Nice, Paris, Rome, Vienna and Zurich) compared to Singapore Airlines network of 11 cities (Amsterdam, Athens, Copenhagen, Frankfurt, Istanbul, London Heathrow, Madrid, Manchester, Paris, Rome and Zurich).

What makes Emirates the biggest threat to other airlines in the Asian region, particularly Singapore Airlines, is its successful growth story.

In the period between 1998 to 2002, the airline has increased its revenue passenger kilometres (RPK - a key measure of an airline's passenger traffic) by 56.07 percent compared to Singapore Airlines' growth of 18.71 percent for the same corresponding period.

Service Development
In terms of service, Emirates and Singapore Airlines ranked 2nd and 3rd places respectively in the Global Skytrax Survey behind Cathay Pacific (1st place and Airline of the Year 2003).

With the introduction of Emirates' new First Class product on the Airbus A340-500 fleet, it has re-defined the standards in First Class travel.

Fleet and Route Development
In June 2003, Emirates placed the biggest aircraft order in civil aviation history worth US$19 billion. The airline has an order for 45 giant double-deck Airbus A380s, 26 Boeing 777-300ER and 20 Airbus A340-500/600s. The order book will increase Emirates' fleet to 125 aircraft by 2012, as part of long-term plans to serve many new countries.

The new jets will also boost flights on existing routes to Australia, China, India, Indonesia, Malaysia, Maldives, Pakistan, Philippines, Singapore and Thailand.

On the other hand, Singapore Airlines' expansion plans are not as ambitious as Emirates but the airline is adding the ultra long-haul Airbus A340-500 to its fleet to service the nonstop flights from Singapore to Los Angeles and New York.

The airline has began taking deliveries of the new Airbus A340-500 with a further five aircraft placed on option. It also has firm orders for 10 Airbus A380s with a further 15 placed on option.

Service Quality
SIA has been "king of the castle" in terms of service quality for many years, and has served as a benchmark against which many other airlines measured themselves.

But, like so many industries, staying ahead is a difficult task to achieve. SIA, like so many Asian carriers - was for many years able to exalt its service quality, based around the efficiency, discipline and general finesse of the Singapore girls (or boys).

As many airlines across Asia have found, the younger staff joining the airline in recent years have a different mindset to their elders - the general Westernisation, mass impact of US TV and movies have all served to create a younger generation with different values and attitudes towards those around them.

Emirates is based on a multi-national staff, and although they perform service at a reasonable level, they are not achieving the service quality of their counterparts at SIA, Cathay, MAS etc.

Product Innovation
Emirates, like SIA, has developed itself around product innovation, and was the first major carrier to offer personal TV across all cabins, although it has fallen behind in seat quality (especially in First / Business).

Emirates is now commencing a product development programme. The new A340-500 First Class from Emirates is without doubt the world's finest, although its new Business class is not up to the levels offered by SIA, Cathay, BA, Qantas etc.
Battle of the Hubs

When it started, Emirates adopted the SIA policy that its customers would be transiting through Dubai - the home market in Dubai not being enough to sustain a globally developing airline.

SIA did the same, and while Singapore was for many years a popular transit
stopover, this is a market where Singapore now seems to have lost popularity.

In contrast, Dubai has invested billions in the home tourism market, and Emirates now enjoys the best of both worlds - transit traffic through Dubai and point to point business for tourists to Dubai.

Changi has been one of the world's best airports for nearly 20 years, and similarly served as a benchmark against which other airports measured standards. Even today, Hong Kong and Kuala Lumpur have brand new airports, but Changi is able to offer a broader and more innovative selection of products and services to the passenger - this is why Changi is currently the only five-star airport.

Dubai built its airport several years ago, and while a great improvement on the old buildings, it is not at the level offered by Changi or Hong Kong. For a relatively short transfer it is okay, but you really do not want more than two to three hours in DXB before getting bored and finding the facilities lacking. Changi can offer much more.

SIA versus Emirates
Comparing the two airlines, SIA has suffered greatly through the SARS crisis, and this served to highlight that SIA management and day-to-day running costs were too high to achieve the required profitability.

Like the sudden realisation at BA that they were grossly overstaffed, SIA is now beginning to realise that the company needs to be much leaner and fitter if it is to provide real commercial growth and profitability.

Emirates, as a newer airline, has always been able to control its cost base more effectively than SIA, despite critics saying otherwise.

Emirates is now a very profitable airline. Virtually every single flight is full.

This does have some side effects; when travelling in First or Business class with Emirates you will often find yourself surrounded by upgraded passengers -
nevertheless, it ensures that no revenue opportunities are missed.

Emirates has never opened routes on political grounds, with all expansion based upon pure commercial sense - will it make money?

Emirates also has some of the best marketing know-how in the industry, and its
name and reputation is pretty well known across Asia/Pacific, Africa, Europe and some parts of North America.

Its massive sponsorship of sport is a sure way of establishing its name among the future travelling public. Rather than modelling a glossy image around the SIA girl format, they simply push out to market the name: Emirates.

PETER MILLER
Hub Development
Both Singapore and Dubai governments have pursued an Open Skies policy to further develop their hubs. As a result of Emirates' aggressive expansion plans, Singapore Airlines has most to lose.

For example, Emirates is already flying non-stop from Sydney to Dubai, thereby cutting out Singapore as a transit stopover point and providing a faster and convenient routing to Europe with one-stop service rather than two stops.

This is possible thanks to the ultra-long haul aircraft, such as the Airbus A340-500s, which have become an aircraft of choice for airlines wishing to provide "ultra longhaul, nonstop point-to-point services" (i.e Sydney to Dubai and Singapore to Los Angeles).

Emirates' strategy of creating Dubai International Airport as a hub makes sense in that it allows the carrier to fly passengers from the Asia Pacific region into Dubai and provide connections to primary and secondary destinations in UK/Europe.

For example, if a traveller wants to fly from Sydney to Birmingham, he or she would take the nonstop Sydney to Dubai flight and then connect onwards from Dubai to Birmingham.

This omits the necessary transfers at busy airports such as London Heathrow where congestion can often result in lenghty delays and inconvenient transfers between
terminals.

Given Dubai's strategic location and visionary government, coupled with
technological advances in aircraft manufacturing, Emirates has flourished faster than anyone, including Singapore, had anticipated.

Low-Cost Airlines
Dubai is fast emerging as the 21st Century global airline hub, while Singapore is faced with an increased challenge from the rapid emergence of low-cost airlines in the South-East Asian corridor.

The Singapore government has had very little choice but to find a quick solution to the problem of a high operating cost structure at the airport. Proposals have included building a dedicated passenger terminal at Changi Airport for use by low-cost carriers, at least two of which are due to be launched in the city state mid-2004.

The low-cost airline terminal would provide limited amenities and passenger service charges would be lower.

Meeting the Challenge
Singapore Airlines recently announced that it would launch a low-fare carrier called Tiger Airways in the second half of 2004 in partnership with investors from the USA and Europe.

Another new Singapore-based airline, ValuAir, is meanwhile planning to launch services in the first half of 2004, while Malaysian low-fare carrier AirAsia has looked at serving Changi while also considering starting an associate airline in Singapore with local partners.

AirAsia has said that Changi Airport's user charges are currently too high to justify
operations.

Ownership
Emirates is owned 100 percent by the Government of Dubai whereas Singapore Airlines Group is 56.76 percent owned by the Singapore Government controlled company, Temasek Holdings (Private) Limited.

Frequent Flyer Programme & Airline Alliance
Both airlines participate in each other's frequent flyer programmes, however Emirates is still not convinced about joining a major global alliance.

The SQ-EK relationship only goes as far as members being able to "earn and burn miles" on each other carrier's flights.

What is surprising is the fact that members of Singapore Airlines' Krisflyer are not able to redeem their miles on Emirates' Sydney/ Brisbane/Melbourne to Auckland services.

No one at Krisflyer service centre was able to explain why this might be the case but one might assume that Air New Zealand has put pressure on Singapore Airlines through the Star Alliance management board to inhibit its participation on these specific routes operated by Emirates.

With ongoing speculation about Emirates' alliance strategy, the airline's president, Tim Clarke, has made it clear that it's corporate strategy is to develop relationships based on code-sharing agreements with various airlines, the most recent being with Royal Air Maroc, Finnair and Continental Airlines.

Network & Growth
Emirates' biggest advantage is that it has a large network in the UK/Europe (19 cities: Athens, Birmingham, Dusseldorf, Frankfurt, Glasgow, Istanbul, Larnaca, London Gatwick, London Heathrow, Malta, Manchester, Milan, Moscow, Munich, Nice, Paris, Rome, Vienna and Zurich) compared to Singapore Airlines network of 11 cities (Amsterdam, Athens, Copenhagen, Frankfurt, Istanbul, London Heathrow, Madrid, Manchester, Paris, Rome and Zurich).

What makes Emirates the biggest threat to other airlines in the Asian region, particularly Singapore Airlines, is its successful growth story.

In the period between 1998 to 2002, the airline has increased its revenue passenger kilometres (RPK - a key measure of an airline's passenger traffic) by 56.07 percent compared to Singapore Airlines' growth of 18.71 percent for the same corresponding period.

Service Development
In terms of service, Emirates and Singapore Airlines ranked 2nd and 3rd places respectively in the Global Skytrax Survey behind Cathay Pacific (1st place and Airline of the Year 2003).

With the introduction of Emirates' new First Class product on the Airbus A340-500 fleet, it has re-defined the standards in First Class travel.

Fleet and Route Development
In June 2003, Emirates placed the biggest aircraft order in civil aviation history worth US$19 billion. The airline has an order for 45 giant double-deck Airbus A380s, 26 Boeing 777-300ER and 20 Airbus A340-500/600s. The order book will increase Emirates' fleet to 125 aircraft by 2012, as part of long-term plans to serve many new countries.

The new jets will also boost flights on existing routes to Australia, China, India, Indonesia, Malaysia, Maldives, Pakistan, Philippines, Singapore and Thailand.

On the other hand, Singapore Airlines' expansion plans are not as ambitious as Emirates but the airline is adding the ultra long-haul Airbus A340-500 to its fleet to service the nonstop flights from Singapore to Los Angeles and New York.

The airline has began taking deliveries of the new Airbus A340-500 with a further five aircraft placed on option. It also has firm orders for 10 Airbus A380s with a further 15 placed on option.

Service Quality
SIA has been "king of the castle" in terms of service quality for many years, and has served as a benchmark against which many other airlines measured themselves.

But, like so many industries, staying ahead is a difficult task to achieve. SIA, like so many Asian carriers - was for many years able to exalt its service quality, based around the efficiency, discipline and general finesse of the Singapore girls (or boys).

As many airlines across Asia have found, the younger staff joining the airline in recent years have a different mindset to their elders - the general Westernisation, mass impact of US TV and movies have all served to create a younger generation with different values and attitudes towards those around them.

Emirates is based on a multi-national staff, and although they perform service at a reasonable level, they are not achieving the service quality of their counterparts at SIA, Cathay, MAS etc.

Product Innovation
Emirates, like SIA, has developed itself around product innovation, and was the first major carrier to offer personal TV across all cabins, although it has fallen behind in seat quality (especially in First / Business).

Emirates is now commencing a product development programme. The new A340-500 First Class from Emirates is without doubt the world's finest, although its new Business class is not up to the levels offered by SIA, Cathay, BA, Qantas etc.

Battle of the Hubs
When it started, Emirates adopted the SIA policy that its customers would be transiting through Dubai - the home market in Dubai not being enough to sustain a globally developing airline.

SIA did the same, and while Singapore was for many years a popular transit stopover, this is a market where Singapore now seems to have lost popularity.

In contrast, Dubai has invested billions in the home tourism market, and Emirates now enjoys the best of both worlds - transit traffic through Dubai and point to point business for tourists to Dubai.

Changi has been one of the world's best airports for nearly 20 years, and similarly served as a benchmark against which other airports measured standards. Even today, Hong Kong and Kuala Lumpur have brand new airports, but Changi is able to offer a broader and more innovative selection of products and services to the passenger - this is why Changi is currently the only five-star airport.

Dubai built its airport several years ago, and while a great improvement on the old buildings, it is not at the level offered by Changi or Hong Kong. For a relatively short transfer it is okay, but you really do not want more than two to three hours in DXB before getting bored and finding the facilities lacking. Changi can offer much more.

SIA versus Emirates
Comparing the two airlines, SIA has suffered greatly through the SARS crisis, and this served to highlight that SIA management and day-to-day running costs were too high to achieve the required profitability.

Like the sudden realisation at BA that they were grossly overstaffed, SIA is now beginning to realise that the company needs to be much leaner and fitter if it is to provide real commercial growth and profitability.

Emirates, as a newer airline, has always been able to control its cost base more effectively than SIA, despite critics saying otherwise.

Emirates is now a very profitable airline. Virtually every single flight is full.
This does have some side effects; when travelling in First or Business class with Emirates you will often find yourself surrounded by upgraded passengers -
nevertheless, it ensures that no revenue opportunities are missed.

Emirates has never opened routes on political grounds, with all expansion based upon pure commercial sense - will it make money?

Emirates also has some of the best marketing know-how in the industry, and its name and reputation is pretty well known across Asia/Pacific, Africa, Europe and some parts of North America.

Its massive sponsorship of sport is a sure way of establishing its name among the future travelling public. Rather than modelling a glossy image around the SIA girl format, they simply push out to market the name: Emirates.