Singapore Airlines, which started its commercial operations of the mega passenger aircraft, A 380, between Singapore and India last Friday — will introduce premium economy segment in this sector. These services are expected to start in about a year or so.

At present, SIA offers three class configuration in its A 380: economy, business and suites. The A 380 flight put to service in the India sector has 471 seats — 399 in economy, 60 in business and 12 in suites. Some of the economy segment seats are likely to be upgraded to provide premium economy services.

Globally, the company plans to start rolling out premium economy services in the second half of 2015. SIA has 19 A 380s in its fleet, all of which will be reconfigured to have a premium economy class of travel. Two of these have been deployed to India — one between Singapore-Delhi and another between Singapore-Mumbai. But, the exact time by which India will start having premium economy segment is not yet clear.

Ticket pricing

SIA was tight lipped on the specifics of ticket pricing for premium economy segment. It did not state much beyond the fact that the segment will be priced higher than the economy class and lower than business class.

But even that is a wide range. The business class tickets are priced at five times the economy segment and suite at over nine times the economy segment, according to booking data for round trip between Delhi and Singapore. The average prices could vary — as SIA follows dynamic pricing and the company does not give out the average pricing gap between economy and business services.

For the premium economy segment, the airline industry charges a premium of 20 to 80 per cent on the economy ticket prices, said Tan Pee Teck, Senior Vice President-Product and Services, Singapore Airlines.

Peck said that the company's marketing team is working on the exact nature of product and pricing now and will take a call on the issue in due course.

As companies tighten their purse strings globally, the key issue is whether the premium economy service will be "economy-plus or business class-minus", Teck said.

In terms of revenue, SIA gets 40 per cent of its revenue from its premium segment passengers such as business, first and suites. SIA signs short, medium and long-term contracts ranging from one to five years with corporates for business class travel with a pre-decided price and traffic.

SIA did not share the capacity utilisation of premium segment as it is considered "competitive information", but the average load factor for all segments put together was at 78-79 per cent in the last financial year. "An airline can always fills seats by lowering fares. But the issue is to balance yields (average money earned per ticket) with load factor," Teck added.

>mamuni.das@thehindu.co.in

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