New Aircraft Are Changing Route Maps

Boeing 737 MAX 8

It all starts with new narrow-body, fuel-efficient, medium-haul aircraft like the Boeing 737-800 and the future 737 MAX 8. Airbus, too, is in the game of improved economics with the coming A320neos.

These latest aircraft from the two big duopolies are remaking routes for carriers everywhere. Vintage jets are going the way of the rotary phone. But it is especially so in Asia, a market where growth has oceanic force.

Let’s consider SilkAir, the regional subsidiary of Singapore Airlines that currently flies to 47 destinations in 12 countries and has been profitable for the last 12 years.

SilkAir just received its first of 23 162-seat 737-800s. In 2017, they’ll start to take delivery of 31 737 MAX 8s. The improved range and fuel-efficiency allows the carrier to open new destinations in North Asia, Central Asia and Australia.

For now, SilkAir is using their first 737-800 on four of their shortest but high-capacity routes: Singapore to Kuala Lumpur and Penang in Malaysia, Medan in Indonesia and Phuket in Thailand. The aircraft replaces a 150-seat A320. Slot restrictions at airports like Phuket do not allow the carrier to increase frequency.

Next month, SilkAir takes delivery of their second 737-800 and they will again transition from smaller A320s and increase their profits flying to six existing destinations in the Philippines, India, Vietnam and Cambodia.

As more 737-800s enter the fleet, SilkAir will fly them into China, where they now serve seven destinations. Seat capacity will increase around 10 percent without adding new flights yet saving fuel.

SilkAir expects to receive the last of twenty-three 737-800s in 2016 and take the first of thirty-one 737 MAX 8s in late 2017. (Southwest Airlines is the MAX 8 launch customer.) SilkAir expects to get the last 737 MAX 8 by the end of 2020, when it retires its last A320.

Let’s remember that SilkAir is a subsidiary of Singapore Airlines. New regional routes flown by efficient aircraft play into the long-term strategy of keeping Singapore a dominant hub in Asia, competing with Bangkok, Hong Kong and even Dubai. About 50 percent of SilkAir’s passengers connect with flights operated by Singapore Airlines.

SilkAir’s current longest route is Singapore-Kathmandu, about five hours and not viable with a wide-body aircraft. The 737 MAX will extend the regional range to seven hours and SilkAir is scoping out routes. In Australia, they serve only Darwin, but with new aircraft Singapore-Cairns is likely. So is Tasmania, with the same special sauce.

SilkAir has launched “A Joy to Fly” campaign, touting 30 kg baggage allowance, inflight meals, reliable schedules and KrisFlyer frequent-flyer miles. The new 737s also offer in-seat electrical outlets, Wi-Fi, movies and music.

The Tarmac’s View: I’ve said it before and I’ll say it again. New fuel-efficient aircraft are changing the world of aviation. Boeing reports they have 1,807 orders for the 737-MAX from 34 customers. Airbus reports 2,610 orders for the A320neo family from 48 customers. The A320neo enters service in 2015, nearly two years earlier than the MAX. Boeing might step up production.

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