Luxury mantra to counter air turbulence
The objective is to generate maximum revenue from the luxury segment - first class and business class customers -- rather than selling economy class seats at competitive rates, reports HT Correspondent.india Updated: Jun 18, 2008 22:47 IST
The surge in prices of jet fuel has led airlines to rethink on ways and means to cut down expenses.
Global crude oil prices, which is hovering over $135 per barrel, has led to a spurt in the prices of aviation turbine fuel, or ATF, all over the world.
Singapore Airlines, the world's most preferred airline, is also feeling the pinch. To cut costs, the airline is not resorting to pruning its staff or reducing the number of flights. Instead, it is resorting to prudent use of resources available.
"We are cutting costs by being more cautious with use of electricity and use of office stationery," Manjit Grewal, manager Northern India said.
"Despite the doom in the industry, we are investing heavily in premium products. Our yield has gone up by 15 per cent in sectors where we have introduced this product," said Chai Woo Foo, general manager India, Singapore Airlines.
The objective is to generate maximum revenue from the luxury segment - first class and business class customers -- rather than selling economy class seats at competitive rates.
Airline executives say this small but high-yield segment generates enough revenue to offset the cost of selling economy class seats at a discount. Revenue from this segment constitutes 40 per cent of all revenues, said airline officials.
First class seats typically cost over five times, and business class over three times, the lowest slab of economy class fare.
Stressing that the airline is not planning to cut flights, Grewal said, "we would (otherwise) not have introduced our best aircraft on the Delhi-Singapore and Mumbai Singapore routes."
Singapore Airlines on Wednesday announced it would increase the number of flights from Delhi and operate Boeing 777-ER(extended range) -- a state-of-the art and 278-seater spacious plane -- on this sector. The airline at present operates two flights a week from Delhi.
If the fuel surcharge is reduced in the future, the airline would pass on the benefit to passengers, he said, adding "Earlier on two occasions we have passed on the benefits of reduction in fuel surcharge to the passengers." On international ticket, fuel surcharge works out to about Rs 10,000 per ticket.