Singapore Airlines finds premium economy a tougher sell on new non-stop US flights

SINGAPORE (Reuters) — Singapore Airlines Ltd. is facing no problem selling business-class tickets on its ultra-long non-stop flights to the United States but is having to price premium economy seats very attractively, a senior executive said on Wednesday.

The carrier last month resumed after five years the world’s longest commercial flight, an almost 19-hour non-stop journey from Singapore to New York.

The airline ordered seven new ultra-long-range twinengine Airbus SE A350-900ULRs fitted with just 67 business class and 94 premium economy seats for those flights and for non-stop services to Los Angeles and San Francisco. These flights have no economy class seats.

It represents a major expansion in the US market for Singapore Airlines and a test of whether the carrier can charge the 20 percent price premium that travel industry data shows is typical for ultra-long non-stop services due to their popularity with time-sensitive business travellers.

Singapore Airlines executive vice president commercial Mak Swee Wah said there was existing demand for business class which he expected would continue to pick up.

For premium economy, however, he said some markets were not “entirely familiar” with the product, which offers more leg room and other amenities than economy class.

“I think we need to continue to stimulate and encourage the market to consider this product, initially with very attractive pricing, but eventually I think people will see that even at prices which we offer it is a good product to purchase because it is a very long flight,” he said at an analyst and media briefing.

His comments came after Singapore Airlines reported on Tuesday an 81 percent plunge in second-quarter net profit, hurt by higher fuel prices, lower airfares and non-cash losses at its part-owned Virgin Australia Holdings Ltd.

Yields, a proxy for ticket prices, fell 2.2 percent in the second quarter compared with a year earlier, failing to help offset the impact of a 24 percent rise in fuel prices.