SIA seeks revision in bilateral agreement

By Gargi Parsai

SINGAPORE, APRIL 16. With a surplus of $ one billion in hand, Singapore International Airline (SIA) is set to become a global player. Joining the 11-member Star Alliance was one way of doing it, but the real thing would be joint ventures, and India and China are the potential markets.

The Airline has sought a revision of the bilateral air services agreement between India and Singapore to add capacity and serve Hyderabad, Bangalore and Kochi. SIA already operates 26 flights to Delhi, Mumbai, Calcutta and Chennai per week with an average load factor of 80 per cent.

With an average $ one billion profit a year, SIA survived the Asian currency crisis in 1998-99 by shifting capacity to Europe, SW Pacific and the Indian sub-continent. Its ability to invest has not diminished and it pulled off a coup last month by buying off a 49 per cent stake in Richard Branson's Virgin Atlantic. As part of Star alliance, it will now bid for a 10 per cent stake in Thai Airways, which is being privatised.

While the partly Government-owned SIA awaits the Indian Government's clarity on plans to privatise Air India, its subsidiary, Singapore Airport Terminal Service (SATS), has already initiated a joint-venture in catering and cargo. In collaboration with the Taj group in Chennai, SATS provides catering service to Air India, Indian Airlines, Jet Airways, Sabena, Malaysian Airways and SIA.

It is now working on a proposal for a joint-venture with the Airports Authority of India at Delhi and Mumbai. The plan includes setting up cargo house and providing cargo services in the two metros.

Senior officials told The Hindu here that SIA was keen on entering the Indian market but was a little cautious now after the SIA-TATA domestic airline project failed to take off. The experience of Singapore investors was also ``bad'' in the case of the proposed joint airport venture at Devanahalli in Karnataka as part of a consortium with Raytheon.

``Markets such as Europe and America are saturated and we want to increase our presence in markets that are growing. Some of these are China, India, South-West Pacific and Africa,'' Senior Vice- President, Corporate Affairs, Mr. Mathew Samuel, said.

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Section  : International
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