Singapore Airlines’ impasse with Flight Center – and what it means for the brand
It’s been a fascinating day, as an outside observer of the impasse between Singapore Airlines and Flight Center – one of Australia’s largest and most powerful travel agents (they’re actually much more than just an agent).
The Contradictions – SIA vs Flight Center
Late last night, SIA sent out an email to its Australian frequent fliers, which announced that the airline’s tickets will no longer be sold through Flight Center. That came as a shock, since it’s like saying your website won’t appear on Google.
But things got more interesting, when Flight Center put out a release countering what Singapore Airlines had said, claiming that they’re still selling SIA tickets, but it’s just not the preferred airline. What that means is if you want to fly from Sydney to London, Flight Center would recommend Emirates, Qantas or another airline, unless you insist on flying Singapore Airlines. And that can still mean a lot of business loss.
No lessons learnt from the Indian fiasco?
SIA flight attendants on flights to India used to be tired by the end of the flight, since loads were high and passengers demanding. But these days, nobody minds doing those flights because the loads are very light. That means less work. And this is because the airline has lost its major ticket sales channel in India for the past six months – the travel agents.
If you recall, late last year, travel agents in India boycotted Singapore Airlines because the airline refused to pay them commissions. And that, in a market where 90% of sales used to be through these agents. It inspired a highly debated article on SimpliFlying about the importance of adhering to cultural sensitivities. And now history seems to be repeating itself.
Adverse effects on a great airline brand
SIA had done a fantastic job of building up a formidable brand in India, through innovative promotions for over five years. But much of these were undermined when agents there refused to sell the airline’s tickets.
Down under, in Australia, SIA has been lobbying to fly the coveted Sydney-USA routes for some time now. And the Flight Center impasse may just hinder that bid. Moreover, the potential impact of losing out on the cash-cow route Kangaroo route from Sydney to London may give competitors like Emirates and Qantas the boost they needed. Add to all this the difficult economic times and record recent revenue drops and you can imagine the trouble SIA might find itself in.
I love flying Singapore Airlines and would rather not see this happening to them. May be it’s the flight of top executives over the years to other carriers. May be its the knee-jerk reactions to save costs in the down turn. May be it’s just bad luck.
What do you think caused this? What do you think SIA can do to emerge out of this? Let’s discuss…
P.S: Special thanks to @MatthewPDavis who’s been updating me about this news.