Singapore Airlines Suites -  A Class Too Far Beyond First

Singapore Airlines launched the “Singapore Airlines Suites” product in October 2007, in conjunction with the new on-board product launch that came with the A380. Featuring an “unparalleled level of luxury” in the “widest seat in the sky”, and sleeping on a “standalone bed that was not converted from a seat”.  The airline promised the Singapore Airlines Suites to be “truly a class that is yours alone”.

Regular First Class travellers who wished to travel on the SIA Suites soon found that they had to pay in the vicinity of 50% to 60% more for Suites. At the same, time, the number of Krisflyer miles one could accumulate was only 10% more than regular first class, and redemption availability for Suites was completely blocked. All SIA staff, including the most senior of management who were eligible for First Class were deemed ineligible for Suites.

“You’re Eligible for First Class, but not for a Class Beyond First!”

In October 2007, Suites for Singapore-London was priced at nearly S$20,000, and Suites for London-Sydney was priced at approximately 10,000 pounds. Several HR departments of companies, including civil service departments in Singapore, issued circulars or directives stating that “Since the Singapore Airlines Suites are a class beyond first, officers who are usually eligible for First Class travel will be ineligible for Suites”.  Evidently, HR departments were hard pressed to justify paying 50% more for senior management to take Suites.

Pushing your Passengers to a Class Beyond First – To Other Airlines

Using the Sabre Airport Solutions tool it can be learnt that, from Calendar Year 2006, till October 2007, SIA filled an average of 30 out of 36 First seats into London Heathrow each day. But from January to October 2008, SIA filled just 12 out of 36 seats a day to London. A drop of over 60% in just a year is alarming. This can’t be solely blamed on the financial crisis, as Lehman Brothers really failed in September 2008.

Analysing Emirates’ First Class loads to London, the number of First Class passengers they carried in 2008 compared to 2007 hardly fell, staying at around 40 to 42 a day! Were these SIA’s ex-First Class passengers going over to Emirates?

Maintaining the Brand Integrity of Suites – Let Them Leave Empty!

Throughout 2008, as loads in Suites plummeted to London and other A380 destinations, and for whatever reason, SIA refused to cut fares to match their competitors. There is no doubt that the SIA Suites is one of the best First Class products out there, but the 50% price differential to First Class made it difficult for companies and governments, both in Singapore and overseas, to justify purchasing Suites tickets for their very senior employees.

Great as it may be, the Suites product is exactly the same as the New Longhaul First Class product on SIA. The entire ground experience is the same, with the same check-in facilities, same lounge, same on-board cuisine and same arrival procedures as First Class passengers. It is hard to argue that a standalone bed and a semi-private cabin, or a 33% chance of landing the middle seats that turn into a double-bed is really worth the extra S$9,000 on a flight from Singapore to London.

SIA Relents Part I – Throw in a Free Stay at the Raffles

In May this year, SIA announced that passengers flying Suites from London, Paris, Tokyo and Sydney can enjoy a free night’s stay at the Raffles Hotel, with a complimentary chauffeur-driven service to the Raffles from Changi Airport. Still though, it is unlikely that many passengers from London would be willing to pay thousands of pounds extra for Suites, to enjoy a S$750 (320 pound) night stay at the Raffles Hotel.

SIA Relents Part II – 300%  miles for Suites, not just 160%

In June, SIA announced that Suites passengers would enjoy 300%  miles, instead of 160% miles. Perhaps this was SIA’s way of acknowledging that for paying 50% more than First Class, Suites passengers should be entitled to a little more than a 10% mileage bonus.

Publically available statistics and evidence still point to SIA struggling to fill Suites, while Emirates and Qantas regularly leave London, event today, with the majority of their First Class seats filled.

Suites – A Class Beyond First or a First Class Branding Debacle?  

The entire experience surrounding SIA’s experience with its Suites branding demonstrates how an idea or a brand that seemed so revolutionary prior to its roll-out, can in reality backfire on a company. In wanting to place a brand premium on the product as “a class beyond first”, together with an expensive 50% price hike compared to regular first class, companies were quick to react to this and banned their staff from travelling in Suites altogether.
In an environment where companies are trying to cut costs, and where many airlines like Qantas and Emirates offer excellent First Class products in their A380 which include onboard bars and showers, and limousine ground transfers at each end (SIA lacks these), 60% of SIA’s First Class passengers in 2007 have either downgraded to Business Class, or switched to other airlines altogether.

In the past couple of weeks, “F” Class codes (which represent regular first class, not suites) were loaded onto the SIA inventory system for Suites-operated flights, though their availability is was blocked. For a couple of days in the week of 26 Jul, SIA’s website even returned Suites fares that were priced without a premium to First Class.
 
While frequent flyers thought that this reflected SIA’s management finally relenting on their policy with Suites, as of 2 Aug 09, the F fare codes have since been removed, and Singapore-London continues to cost nearly S$20,000.
 
After nearly two years of refusing to take any meaningful steps to regain their First Class marketshare on A380-operated routes, one would have thought that it is  better to be late than never. Alienating your First Class passengers should be the last thing any premium airline should aim to do, and it is a pity that SIA has done just that.

What are your thoughts about where SIA’s A380 suites can go next? What can they do immediately to cover their tracks? Let’s discuss in the comments or over on Twitter (@simpliflying)

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Given the significance of being one of the first few airlines to operate the Airbus A380, and since it will once be the 2nd largest operator of the A380, it’s a mystery why Qantas has not capitalized on this event to build its brand further. Moreover, given the recent negative press generated by the string of Qantas safety lapses, there is an urgent need to repair the damage done.

How did Qantas miss this golden opportunity?

1. Lack of radical product innovation: The four classes Qantas product for the A380 are not a radical improvement from its existing fleet of wide body planes. Moreover, the peculiar seat color choices make the cabin look dull. This, as opposed to the double-bed suites introduced by Singapore Airlines for First Class, and showers as well as a bar introduced by Emirates for First and Business Class, in their A380 planes. Both of these airlines took full advantage of these product innovations and marketed themselves well, rightly so.
2. Retracting some service features: Qantas has shelved plans to offer live internet access on its A380 planes from next month as American Airlines comes under fire from customers and flight attendants for allowing passengers to surf porn websites. Last year Qantas general manager John Borghetti was talking up the inflight entertainment system on the A380s, saying “there has never been anything like this on board a commercial aircraft”.But the lack of a full internet service will most likely disappoint many passengers who will have to make do with a limited selection of “cached internet content”. This will be a turn off for some passengers, who were probably looking forward to being connected while they cross the Pacific. Moreover, there is little official explanation given to why the service was retracted.
3. Lack of customer engagement and buzz at launch. Singapore Airlines created an eBay auction for its first A380 flight. Emirates treated an exclusive group of VIPs and media folks to a joy-ride once they landed the big bird in the US. Qantas, ironically, is keeping the event pretty low-key. In an official response from Qantas, this blog was told that, “Much of our media related activity around the delivery and entry into service will take place in Australia, with a very small contingent to be in the first flight on 20 October”. But why? Why not leverage this special event to build the brand further and engage the customers? We wonder.

What can Qantas do now to leverage on the A380 launch?

It’s probably too difficult and expensive to overhaul the product right away. So, it’s got to be marketing what they’ve got well. May be Qantas can play up the fact that they will be the 2nd largest operator of the largest commercial plane in the world. May be they can highlight their in-flight service and the new uniforms. May be, they can come up with better advertisements showcasing their A380 product features,and not just the plane from the outside.

What do you think? How can Qantas lift up their brand image with the first A380 take off in Kangaroo colors? Let’s discuss.

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1. Which airline tested wi-fi for the first time last week?
2. Which airline will be testing bio-fuels next month?
3. Which airline is the first to have showers in its first class?
4. Which is the first airline that’s going to fly the Boeing 787?
5. Which airline was the first to fly the A380 aircraft?

Almost anyone who’s traveled on an airplane before would be able to answer the last one – Singapore Airlines. But hardly any would be able to answer the other questions. For the curious, American Airlines tested wireless internet last week, Japan Airlines will test bio-fuels, Emirates will have showers on its new A380 flight to New York city and ANA will be the first to fly the 787. Wondering why the huge disparity in awareness? Simply because Singapore Airlines engaged its customers and let the world know that it was doing something new.

Being the first brand to give customers a refreshing, new experience is something to beat the drum about. In turbulent times for the industry like these, airlines should take the opportunity to let the world know about every new initiative they are taking. Let alone the need for a Singapore Airlines’ style big bang, something more than a simple press-release is likely to be lapped up by thirsty customers. What if American Airlines had created a contest, where winners would be able to use the wi-fi service free? How about Japan Airlines doing a marketing stint with Al Gore, highlighting the importance of using bio-fuels? May be Emirates can give its top frequent fliers a chance to experience those showers, even before the first flight.

Not only will such activities create loyal customers, but the buzz created will be more than enough to offset some of the flak airlines have been receiving lately due to the additional charges being imposed. Being the first to provide additional value to customers is not very common in the airline industry, and when it happens, airlines should capitalize on such an opportunity.

Did you know that a number of United Airlines’ planes have added iPhone and iPod support? Again, the answer is probably a resounding “No”.

Time to wake up! And beat the drum about it.

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Some SIA customers have received an email recently inviting them to come up with creative portraits that show the A380 near a famous London landmark. Every week, the top voted submission gets featured on the frontpage of SIA’s A380 Gallery. To top it all off, customers are also being encouraged to share their A380 experiences on the same website.

This is a commendable attempt to engage the customer before the flight, hence aligning Brand Xpectations, and continuing the engagement post-flight, encouraging Brand Xpression (something not many airlines are good at). Customers who depict A380 near a London landmark are literally fantasizing that they are present at the location themselves – what better way to induce a person to get a ticket on the first A380 to land at Heathrow? Also, with a large number of customers blogging about their A380 experiences anyway, consolidating them on a single SIA-operated website makes perfect sense. The customers can enjoy some online fame, as other read their experiences and potential customers can read ahead if SIA is delivering on the Xpectations.

The innovative use of user-generated content involves the customer before and after the flight, and extends the engagement with the brand for a much longer period of time than other carriers are able to. SIA currently seems way ahead of the game. Let’s see how long others take to catch up.

Ponder that!

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