Singapore Airlines: Voted Best in Asia

Ser Jing - Checking In On SIA Engineering's First Quarter Results (pic)  Singapore’s flagship airline company Singapore Airlines (SGX: C6L) has been voted as ‘Best Airline in Asia’ in the 2013 World Airline Awards. In addition, it won third place on the ‘Airline of the Year’ list, behind second and first-placed Qatar Airways and Emirates. SIA has been among the top three in the ‘Airline of the Year’ list since 2009.

The World Airline Awards are based on survey results collated by research firm Skytrax from more than 18 million travellers in more than 160 countries. Chief Executive Officer of Qantas Airways (winner of the 2013 Best Airline Australia-Pacific Award) Alan Joyce commented that “Skytrax is a leading indicator of passenger satisfaction”.

SIA’s enviable rankings among regional as well as global airlines in this year’s World Airline Awards are a welcome boost for the company amid recent scrutiny of its once-leading brand value. Last month, Singapore’s largest bank DBS (SGX: D05) overtook SIA as the country’s most valuable brand, according to Brands Finance’s ‘Top 100 Singapore Brands Report 2013”.

DBS’s brand value grew almost 50% to US$3.48b and jumped from third place last year to claim pole position. Meanwhile, SIA slipped one spot down to second place after its brand value had dipped by US$101m to US$3.12b. That’s not all for the airlines though. According to Straits Times Senior Correspondent Goh Eng Yeow, Brands Finance warned that SIA “runs the risk of losing its No.2 position next year unless some significant efforts are undertaken to grow the value of the brand”.

That has also prompted Goh to question if the recent decline in SIA’s profitability (earnings for the financial year ended March 2011 was S$1.09b, but has since dropped to S$379m for the financial year ended March 2013) was due to erosion of SIA’s branding and by extension, goodwill among travellers.

In any case, SIA has received positive affirmation of its quality from travellers around the world based on its rankings in the 2013 World Airline Awards. But, it remains to be seen if SIA can maintain its goodwill among flyers and turn the situation around to return to better profitability.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.