Low-cost carriers can get more profit in the short term
So if some of the demand for business travel doesn’t come back for a while, that is, even if it’s fully back, the outlook for airlines servicing more leisure travelers is probably bright in the short term.
Low-cost carriers that have survived the pandemic can benefit from stagnant demand and be very successful. For example, UK low-cost carrier easyJet was expected to fly up to 60% of 2019 levels between July and September 2021. In contrast, flag carrier British Airways flew only 45% over the same period. People with a strong domestic traffic base, such as the southwestern United States, may be even better.
SIA faces even greater challenges in the future and will not talk about the domestic market. In May, the airline announced a net loss of S $ 962 million for the third consecutive year.
Some of its pre-pandemic movements can provide it well. The merger of SilkAir during the pandemic was announced in 2018, shifting some regional routes within the SIA Group’s portfolio, including Scoot. But it’s too early to convey the impact of the integration.
However, one of the complex factors is that the strict restrictions on COVID-19 in Singapore may have allowed Qatar to steal the SIA march during a pandemic.
Qatar Airways carried 5.8 million passengers in the fiscal year ending March 2021, compared to Singapore Airlines’ 457,000 passengers during the same period. Qatar also reopened to fully vaccinated international travelers without quarantine at the beginning of July 2021.
I traveled to Qatar several times during the pandemic and was impressed by the hustle and bustle of Doha Airport, in contrast to the gloomy sight of Changi, where most were closed. It’s time to see if some of the travelers who have moved to Qatar may decide to stick to their new route and avoid their old Singapore stop.
