Singapore Airlines continues to offer cheap premium economy fares on US nonstop flights, particularly Los Angeles

Whether supporting a tighter travel policy or alternatively perhaps affording travellers a little more comfort, it is clear that the premium economy cabin is being increasingly used by corporate travellers. Airlines are having to closely look at pricing algorithms to continue to encourage travellers to trade up to the travel class, rather than trade down.

In the case of Singapore Airlines (SIA), it continues to offer very low premium economy fares for its A350-900ULR nonstop services between the US and Singapore, particularly from Los Angeles, one year after sales were launched.

SIA resumed nonstop flights on Singapore-Newark in Oct-2018 and on Singapore-Los Angeles in Nov-2018, which are served daily and ten times weekly. It also uses the aircraft on three weekly Singapore-San Francisco rotations, supplementing a daily nonstop service that was launched in Oct-2016 using A350-900s. SIA configures its A350-900ULRs with 67 business and 94 premium economy seats while the non-ULR is configured with 42 business, 24 premium economy and 187 economy seats.

Initial fares were very low in both cabins as SIA tried to promote the new nonstop flights, but while business class fares stabilised for the most part premium economy fares remained low throughout 2H2018 as SIA tried to stimulate demand and fill up the unusually large premium economy cabin.

Intelligence specialist CAPA – Centre for Aviation took a detailed look at fares in Dec-2018, when they remained low for travel well into 2019. At that time SIA was offering premium economy fares between the US and Southeast Asia for around USD1,000 return on several city pairs and for travel originating in either region.

SEE RELATED REPORT: Singapore Airlines A350-900ULR creates premium economy glut

Somewhat surprisingly SIA has continued to offer extremely low premium economy fares on A350-900ULR flights. This would indicate it is still struggling to fill the huge premium economy class cabin – the fares are well below premium economy fares on competitors and are often even below regular economy fares on some competitors (they are also about half the price of SIA’s cheapest premium economy fares to Europe).

SIA is currently offering premium economy fares from Singapore to Los Angeles for only SGD1328 (USD978). This is valid for outbound travel from 1-Sep-2019 to 31-Oct-2019. Fares are higher but still reasonable for San Francisco and Newark, an indication Los Angeles is particularly struggling.

Los Angeles has more nonstop premium economy seats (940 per week each way) than the other two markets (674 from Newark and 450 from San Francisco). CAPA had stated in its Dec-2018 analysis that SIA ideally would operate the non-ULR on Los Angeles given this market has less premium demand than San Francisco and New York.

“Selling 187 seats along with 42 business class seats and 24 premium economy seats is a much easier proposition than the 67 business class seats and 94 premium economy seats on the A350-900ULR, given the passenger mix in the Los Angeles market,” CAPA stated. “Los Angeles has significant leisure demand to/from Southeast Asia and India.”

SIA is unable to operate A350-900s on Los Angeles-Singapore currently; San Francisco-Singapore is feasible as it is one hour shorter although there are payload limitations in winter. However, an anticipated MTOW increase for the A350-900 should make Los Angeles-Singapore feasible in future without significant payload limitations. If this arrives, it seems likely SIA will switch to the non-ULR for at least some of its Los Angeles-Singapore flights.

Fares on this route have been alarmingly low from both Singapore and Los Angeles. From Los Angeles, SIA is currently offering premium economy to Singapore for only USD999 return including taxes for travel in Aug-2019. This same fare is also available to Bangkok, Bali, Phuket and Phnom Penh with a connection in Singapore.

These fares are bargains given that August is a peak month for holiday travel. Domestic US fares this time of year can be higher than USD1,000 return and the cheapest US-Europe are also generally higher than USD1,000 in August.