The baton passes at Singapore Airlines

The Centre for Asia Pacific Aviation (CAPA) has analysed the implications of the decision by Singapore Airlines’ CEO, Chew Choon Seng, to step down from his role at the end of 2010.

His successor is Goh Choon Phong, currently EVP for Marketing and Regions.

“As the baton passes, once again to a man who has been groomed as a future leader for several years and who has gained experience in the field as well as in many parts of the airline, there are some new issues to be confronted,” CAPA noted.

“For, despite its still-revered stature, Singapore Airlines has become a shrinking force, the price of regained profitability.

“SIA flew almost 12 percent fewer seat kilometres in July 2010 than it did in July 2008 (even though this involved a 0.3% year-on-year increase).

“Over the same two-year period, Cathay Pacific contracted its capacity by just two percent, whereas Emirates has expanded by close to 30 percent.

“For Singapore Airlines, the capacity restraint has been about rebuilding load factors and yields.

“It has been remarkably successful at both, as load factors leapt and a consequent recovery in yields (albeit still below pre-crisis levels) helped the airline avoid a full-year loss in the year to March 2010.”

CAPA added, “As with pre-eminence in any sphere, hanging onto the lead will generally require compromises; and it may be that SIA is now embarking on a different course.

“Just as excellence has to be a given, profitability is still vital for an airline that has become so closely connected with Singapore’s global image.”

CAPA suggests that the measure of the new CEO’s success will be his ability to give SIA greater presence in China, something his predecessor failed to do.

“For Mr Goh, as incoming CEO, success in that arena will be the measure by which Singaporean history judges him. He will be expected to retain the flag carrier’s global superiority and continued prosperity, even despite a rapidly shifting industry foundation.

“That alone is a big enough task,” says CAPA.

“Meanwhile, restoring SIA’s larger footprint may become a secondary target, even if it remains a goal.

“But if he (Goh) can secure a partnership, on reasonable terms, with a major player in China, he will also have anchored his place in Singapore’s aviation history.

“If he doesn’t, Singapore Airlines may be forced to accept the long term role of a high quality niche player.”