Singapore Airlines Adds Chicago - 2001-07-16

Singapore Airlines this summer will open its first new U.S. gateway in nearly a decade when service in and out of Chicago launches on Aug. 2. The destination coincides with the airline's ongoing business travel product development and new Star Alliance contracting options for U.S.-based corporate accounts.

The carrier said Chicago "opens a whole new dimension for many corporate accounts," as it previously had to funnel passengers from interior cities to one of its coastal gateways: Los Angeles, Newark, New York JFK and San Francisco.

"We believe we have a core group of loyal SIA passengers in the Midwest. The Chicago market, both corporate and leisure, can grow quickly in the years ahead," said Colin Neubronner, Singapore's new vice president of the midwest region. The fact that Singapore's Star Alliance partner United Airlines is headquartered in Chicago certainly helps its position as the foreign carrier strives for name recognition in a market served by most of the world's top carriers.

The thrice weekly Chicago service, aboard Boeing 777-200ER aircraft, will fly through Amsterdam. The carrier said it plans to boost frequency as demand warrants.

Meanwhile, SIA indicated that Star would progress alliance contracting for corporate clients in the near future. "We are looking at a more coordinated approach in the United States and the legal details now are being worked out," said Walt Meyer, the carrier's vice president of passenger marketing in the United States. "Within a few months, you'll see that happen."

In the meantime, Meyer said there is nothing to preclude Singapore from being involved in corporate contracts that also include such immunized partners as United and Lufthansa, though such participation could not be as fully integrated. However, some corporate buyers have had trouble folding Singapore into Star contracts, as the carrier locks horns with its partners over the specifics of revenue sharing. Indeed, Singapore's high service standards and strong regional positioning gives it clout in its own right to approach corporations and fill seats. Meyer, stating the complexity of alliance deals, said only, "As far as we are concerned, we'd settle what we have to settle ourselves."

Chicago will become an important element in Singapore's recent push to secure global deals for U.S. clients, regardless of alliance coordination. The U.S. salesforce, which interfaces with the global accounts department in Singapore, in the past year has focused more on that segment of the business. "In our own recent research we found that a lot of corporate travel managers really are trying to develop long-term relationships with a few key suppliers," Meyer said. "So our goal is to determine how we can develop those relationships." For the carrier's particularly important U.S. corporate clients, SIA offers a key accounts desk staffed by "the cream of the crop of the entire salesforce."

Mark Walton, principal of Consulting Strategies in Rolling Meadow, Ill., said the success of Chicago as a transpacific gateway--for United Airlines as well as such Asian flag carriers as Japan Airlines and Korean Airlines--along with SIA's service reputation, bodes well for the carrier's market entry. "Singapore will garner its share of customers based on its brand recognition, primarily in first and business cabins," Walton said. "But its presence may give travel managers a bit of difficulty on the enforcement issue. If you are a Northwest Airlines corporate client in Columbus, Ohio, for example, while you could stay online and travel on Northwest via Detroit or Minneapolis, you also could travel on United, or whichever carrier, to Chicago and jump on Singapore. This will be a big lure for the traveler."

SIA currently has no plans to extend its zero commission policy to U.S. travel agents, though the idea is under continual evaluation. The carrier late in 1999 abolished commissions in its home market (BTN, Dec. 6, 1999), a move later modeled by British Airways and now under review at several other carriers. A transitional 5 percent documentation fee is set to expire in October.

SIA beat many competitors to the punch in offering inflight Internet access. "This represents a big change in how people can use information while they are traveling," said spokesman James Boyd. "It takes away some of the anxiety for business travelers while they are rushing to get work done at the airport before boarding."

The satellite-based system was installed earlier this spring on a 747 serving Los Angeles and Tokyo from Singapore. Installations will continue on the remainder of the long-haul fleet during the next year. Access is free through Oct. 1, when a "modest fee" will be applied.

The carrier also claimed to be the first to offer wireless flight-alert messaging to customers anywhere in the world. That expansion of wireless messaging introduced last year to Singapore-based passengers, went live last month.