Singapore Airlines

[Stocker]

Travellers snap up half-price business tickets on Singapore Airlines after computer error

Read more: http://www.smh.com.au/business/aviation/...z3KuY8tgRV

[piggo]

Not SIA, but will there be similar impact to SIA's fuel costs next year?
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Airline Profits Seen Rising 73% to $19 Billion on Lower Oil

http://www.bloomberg.com/news/2014-12-01...r-oil.html

[CityFarmer]

Fuel hedges as far as 6 months ahead, while ticket bookings aren't, doesn't seem a "properly usage" of hedges, as far as I know?

Moreover, I thought the fuel surcharge is a mean to transfer fuel volatility to customers of airliners?

(confuse, and thus avoid airliner even amid lower fuel price)

Casino-like fuel hedges seen hurting airlines as crude plummets

SINGAPORE (Dec 5): Investors from Sydney to Mumbai cheered the plunge in crude-oil prices, sending Asian airline shares to their highest level in three years. The bad news is several carriers could end up losing money from the sudden drop.

Some Asian carriers, like Singapore Airlines ( Financial Dashboard), have hedged fuel at an average of US$116 a barrel of jet fuel, when spot market rates are about US$85. That can result in losses on paper as carriers will have to account for their wrong-way fuel hedges or pay charges to unwind contracts prematurely.

Oil’s dramatic decline in the past month is a replay of events in 2008 and 2009 when Hong Kong-based Cathay Pacific Airways, Chinese carriers and Singapore Airlines all reported millions in losses because of wrong-way bets on fuel.

An inability to take advantage of a drop in their biggest expense also means airlines may be reluctant to cut fuel surcharges and lower ticket prices for consumers.

“It’s like going to the casino,” said Mark Clarkson, a Singapore-based business development director at OAG Aviation, a flight data firm, about hedging.

Potential losses sometimes could be much bigger than at a casino, he said. “There are a lot of zeros at the end.”
...
http://www.theedgemarkets.com/sg/article...e-plummets

[specuvestor]

Hedge means you priced your product to be profitable at US$116 on a CONSISTENT basis, rather than trying to forecast where prices going to be, which many are actually doing. Net result is that the profit should be what you are expecting, rather than windfall.

Reason why I view some of these speculative is because they vary the amount of hedges that makes the word "hedge" a misnomer. And it is not just airlines but other commodities as well, from palm oil to gold.

Ironically some companies hit cashflow problems when they have to pay up for their losses in hedges ie margin calls before they get cashflow from their products, even though on longer term they are hedged right. And then there is also basis risk because oil and jet fuel are not the same.

In theory always sound easy until you have to do the grunt work. That's why you pay for CFO

That said, you can only "hedge" that long. Structural advantages ie cheaper input costs are much more lasting.

[corydorus]

I don't fully understand the hedging process. However if am to hedge, it will be to the extend such that my operation risk is covered till i am able to adjust my cost or for SIA situation, ticket price. So i do not fully understand the article less the CFO do not know what he is doing. If the concern is relative widening profitable earning between airlines due to different hedging criteria, yes i would agreed. But from profit to loss due to lower oil price, this needs to dig further.

[greengiraffe]

Jelek - No longer A Great Way to fly and no longer Honourable

When u think u booked the sellers liao, seller says bo pa kay... replay the game... how can... so many unexplain jokes related to sovereign linked companies these days... problems with people working in ivory towers?

http://www.bloomberg.com/news/2014-12-04...seats.html

Singapore Air Resolving Business Class Economy Fare Snag
By Kyunghee Park Dec 5, 2014 12:38 PM GMT+0800
Singapore Airlines Ltd. (SIA) was working with travel agents in Australia to recover the difference in fares on business-class tickets that were mistakenly sold at economy-seat prices.

Some travel agents sold the tickets using a “booking class” that was originally designated for economy seats, Singapore Air said in an e-mailed statement yesterday. The airline said today the tickets sold involved 900 segments, or journeys between two cities. Singapore Air said it doesn’t immediately know how many people purchased those tickets. The fare conditions state that it’s only valid for coach class travel, according to the airline.

“We are working with our travel agent partners to ensure that our customers are notified of this issue, to ensure there is no disruption to their travel plans,” Singapore Air said.

The carrier has advised travel agents of options for those affected customers, including paying the difference to its lowest business class fare, flying on economy class or getting a full refund, Singapore Air said.

The affected tickets between Singapore and European destinations were sold by online agents in Australia from Nov. 29 to Dec. 1, according to an News Corp. report yesterday.


Photographer: Munshi Ahmed/Bloomberg
Passengers check-in at a Singapore Airlines Ltd. business class check-in counter at... Read More
Singapore Air rose 0.3 percent to S$10.98 as of 12:35 p.m. in the city.

(An earlier version of this story was corrected to say tickets sold involved 900 segments)

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Suresh Seshadri, Dick Schumacher

Travellers snap up half-price business tickets on Singapore Airlines after computer error

Read more: http://www.smh.com.au/business/aviation/...z3KuY8tgRV

[natnavi]

What a 'great' way to keep your customers SQ. With dwindling profits, they chose to look at the short term and recoup their loses rather than be far sighted and win more customers.

Way to go.

[specuvestor]

See my post on the wifi issue. It's actually the same thing but now multiplied a factor of at least 10

So clueless that it's scary now

http://www.valuebuddies.com/thread-261-p...#pid100475

[corydorus]

I do think it will impact SQ much. The regular Customers who want to take SQ, is not going after mis-priced ticket. They are willing to pay the right price. That's how SQ command a premium. Maybe even a good chance for those who got some deals out of it to enjoy the ride and end up positive.

[CityFarmer]

The company management heard VB buddies' opinion?

Singapore Airlines to honour all bookings after premium-ticket error

SINGAPORE (Dec 8): Singapore Airlines ( Financial Dashboard) said it will honour all bookings customers made on business-class tickets the carrier wrongly sold at economy fares to ensure their travel plans aren’t disrupted.
...
http://www.theedgemarkets.com/sg/article...cket-error