SilkAir commits to Cairns route by upgrading its premium product…but could others be on the horizon?

SilkAir plans to upgrade its premium product in the Cairns market in 4Q2017 after it takes delivery of its first batch of 737 MAX 8 aircraft. The 737 MAX 8 will offer an improved business class product, 50% more spacious, compared to the 737-800 but the same economy product.

SIlkAir, a full-service subsidiary of Singapore Airlines, plans to take delivery of its first 737 MAX aircraft in Sep-2017.  SilkAir chief executive Foo Chai Wai told CAPA on the sidelines of the 6-Jun-2017 IATA AGM that Cairns, Bangalore, Hiroshima and Hyderabad will be the initial regular routes with the new fleet.

Singapore-Cairns, a nearly seven-hour flight, is currently SilkAir’s longest route. Mr Foo said Singapore-Cairns, Singapore-Hyderabad and Singapore-Bangalore will transition from the 737-800s to the 737 MAX 8 as the first batch of MAX aircraft are delivered.

SilkAir plans to enhance its business class product with the 737 MAX 8, making it the ideal aircraft for longer routes which operate overnight.

The 737 MAX 8 is ideal for longer medium haul routes given the fuel efficiency and range improvements over the current generation 737-800s. SilkAir plans to enhance its business class product with the 737 MAX 8, making it the ideal aircraft for longer routes which operate overnight.

Mr Foo said the 737 MAX 8 will have the same economy class product and configuration as the 737-800. However, SilkAir is cutting one row of business class to provide improved pitch for business class passengers flying on its longer routes.

SilkAir configures its 737-800s with 150 economy seats and 12 business class seats. The 737 MAX 8 will have only eight business class seats. The business class seats will still be recliner style seats in 2×2 configuration but legroom will improve significantly as the business cabin will be 50% more spacious. SilkAir will offer the same WiFi and streaming in-flight entertainment product that it now provides and will still not have any seatback IFE monitors in either class.

SilkAir currently operates four weekly flights to Cairns, upgrading to five weekly flights in Jul-2017. It also operates five weekly flights from Singapore to Darwin, a shorter route which will continue to operate with 737-800s for the time being.

SilkAir has been approached by other Australian airports keen to attract new international services including Broome and Karratha. SilkAir has not committed to launching Karratha – which currently does not have any scheduled international services – despite recent statements from the Karratha mayor. SilkAir for now has no plans to expand its Australian network but continues to review new route proposals.

Cairns was launched in 2015 as a tag with Darwin following an approach from airport and tourism authorities in Queensland, which were keen to regain a link with Singapore and offered SilkAir attractive incentives. The route has quickly proven to be successful, prompting SilkAir to decouple Darwin and Cairns and add frequencies to Cairns.

SilkAir launched Darwin in 2012, marking its foray into the Australian market. It has since carried approximately 400,000 passengers to and from Australia, according to Australia BITRE data. In 2016, SilkAir carried 89,000 passengers on its two Australia routes with an average seat load factor of 75%.

SilkAir annual passenger traffic and average load factor on Australia routes: 2012 to 2016

Note: SilkAir launched services to Australia in 2012.
Source: CAPA – Centre for Aviation & BITRE.