Aggressive Gulf carriers chasing SIA from lucrative European airspace

Emirates is targeting Singapore's corporate market.

SIA is being chased out of its lucrative European market by the aggressive expansion of Middle Eastern carriers, with Gulf carriers looking to clinch a larger share of the Singapore market in 2015.

OCBC noted in a report that SIA’s introduction of the premium economy class will cause a 4% total seat capacity reduction to Europe from the second half of the year onwards.

Though the move is intended to boost SIA’s flagging yields, increasing competition from Gulf carriers for European flights may negate such effort.

In its February operating statistics, SIA attributed its weak passenger volume to intense competition on European and American flights.

Apart from threats abroad, SIA will also have to grapple with Gulf carriers looking to expand further into the SIngapore market.

“With Emirates gaining better connectivity as it also increases its market share for flights between Singapore and New York (dropped by SIA in Nov-13), we believe competition is definitely intensifying for SIA,” noted the report.