It’s always good to be first, except when it’s not.
Singapore Airlines has innovated a number of product offerings and been the launch customer for cutting-edge aircraft in the past, but it has recently contended with rivals’ new cabin launches, waiting on the wings to decide what to do about its fourth cabin class.
The airline’s delay has raised questions, even gathered criticism, but it was clear from the reveal event in Singapore of the airline’s new Premium Economy product that, for passengers, the final result is well worth the wait.
For Singapore Airlines, taking its time to observe the market, to plan the cabin product carefully, rather than reacting precipitously to competition was a strategic decision, although it has taken a lot of heat for its deliberative move. In fact, while its Economy class was top of class in Skift’s recent rankings, its Premium Economy class didn’t make the cut at all.
As Singapore Airlines Executive Vice President Commercial, Mak Swee Wah, says of the timing: “Premium Economy is something that has been around for many years, but it’s in the last few years that you find that, because of changing consumer trends, the changing industry landscape, and changing product trends, clearly there is a gap open now.”
Mak sees the gap in exactly the same demographics that leading industry trend watchers have previously pointed out: the entrepreneur, and the more affluent leisure traveler as embodied in the “Silver Surfer” [see more below].
Christopher Nurko, Global Chairman of Futurebrand, was the first emphasize the importance of providing a more personalized cabin lay-out, focused on the purpose of the trip and the personal priorities of passengers. He suggested that there is strong demand for a cabin product that offers a “safe zone” for those who travel on business without a generous corporate budget to fund their trip.
This cabin, he suggested, should be a quiet place to rest and work, with all the amenities needed to be productive in flight, and the pampering and comfort one would need for a restful long-haul flight. As Nurko sees it, the entrepreneurial market is vast and growing.
Comfort But Not the ‘Full Works’
Mak of Singapore Airlines identifies this demographic for SIA’s Premium Economy target customers. “Within the corporate sector there are those who travel business class, but there are those who say: ‘I want more comfort but not quite the full works,’” he says.
Peter Knapp, Global Creative Officer of Landor Associates, has defined the ‘Silver Surfer’ as an active leisure traveler of retirement age. This is a passenger who maintains an active lifestyle, highly values the experience of travel, seeks adventure, and, most importantly, has the budget to pay more for added comfort and convenience, yet isn’t about to throw away vast chunks of his or her hard-earned nest egg on a single flight.
Some of these passengers may have special needs for mobility accommodation, and most will book up if the product they’re getting is attractive enough to make a modest fare differential irresistibly tempting.
Mak says the new SIA Premium Economy is appropriate for this passenger too.
“Even [in the leisure category] you also find that it is segmented. Not everyone will want to travel Economy. Some want real budget, but some also say: ‘I will pay a bit more for better product or more comfort.’”
It Wasn’t Done in a Rush
Mak defends why it took Singapore so long to unveil its Premium Economy product. “Over the last four years you find that there is a clear distinction in the different segments,” Mak says. “We have studied it many times. A couple of years ago we determined that the time was right to enter this mid-stream offering.”
There are plenty of skeptics who argue that Singapore is too late with its introduction of Premium Economy and lost an opportunity to take market share. “I think clearly there is a market segment for this product,” Mak says. “[The SIA Premium Economy product is] for those who want the entire experience: the seat, the upgrades of the seat, the food, the extras, and, most importantly, who want that wrapped up in SIA service excellence that we’re quite proud of. We think that it will place us not just among all the other programs but standing out.”
Mak also believes that what Singapore Airlines has finally delivered is attractive enough that it may warrant expansion.
“We have sized the cabin according to what we think the demand will, but the we’ve done it is also to allow for flexibility in expanding the cabin should there be an upsurge in demand in future,” he says.
Two years to make a decision on something as delicate as the introduction of a new fourth cabin class, and to prepare its launch, is consistent with taking the time to design then produce a product which delivers on its promise—and the Singapore Airlines Premium Economy product delivers what it should.
Singapore Vs. Virgin Atlantic
It is not a product to be compared with Premium Economy’s first pioneer: Virgin Atlantic. Placed side by side, Virgin Atlantic still offers some passenger comfort benefits that Singapore does not feature in Premium Economy. Nor should it.
The two airlines are completely different, with distinct strategies and routes. The needs of their customers also differ and their overall product configuration differs. Virgin Atlantic does not offer a product to match Singapore Airline’s Business Class, or First Class. More importantly, SIA has not deployed this product to compete with Virgin Atlantic.
The airlines against whom SIA competes, however, will now have to contend with a well thought out product that gives passengers plenty of reasons to book that ticket.
The product, for its market and compared to nearly everything else in the skies, is pretty hard to beat. Added to that, is the signature Singapore service, available on the aircraft from nose to tail.
“Customers can expect to be pampered,” says Mak. “Many of our customers have been asking for a Premium Economy offering and we are confident that what we are delivering will exceed their expectations.”
SIA has an added advantage up its sleeve with this product, something that no other airline in the world can offer: Singapore.
With the launch of the first service to Sydney, the airline encourages strong demand. As Australian Business Traveller’s David Flynn says, a survey conducted by his publication on the preferences of Australia’s most frequent travelers reveals that Singapore leads all other destinations as a stopover on routes to Europe with 40% choosing to stop in Singapore, beating both Hong Kong and Dubai by a wide margin. Some 20% to 30% more travelers preferred Singapore.