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Singapore Airlines is investing more than S$2 billion in its next-generation cabin products, as the carrier doubles down on its premium positioning despite a challenging global operating environment.
The investment will cover 41 retrofitted Airbus A350 aircraft and 31 new Boeing 777-9 aircraft, taking the total number of aircraft featuring the new cabins to 72 - almost half of Singapore Airlines' current fleet.
The new products will span First Class, Business Class, Premium Economy and Economy Class, with the airline looking to enhance the passenger experience across all cabin categories.
Explaining the rationale behind the substantial investment, Lee Lik Hsin, Chief Commercial Officer of Singapore Airlines told CNBC-TV18 the airline's strategy has always been to position itself as the best full-service premium carrier.
"Singapore Airlines' strategy all along is that we want to be the best full-service premium airline that we can be, so that we keep our customers coming back to us. And in order to do that, we have to provide the best possible products and services to our customers. For that, you must continuously invest in order to keep making improvements," Lee told CNBC-TV18.
The investment comes at a time when airlines globally are grappling with rising operating costs, geopolitical uncertainty and elevated jet fuel prices. However, Lee said the airline was not looking to time its product investments according to economic cycles.
"The operating environment is definitely challenging. But unfortunately, with such investments in products and services, we cannot time it in accordance with economic cycles. We cannot say we only invest when we're making money and when times are tougher and we make less money, we don't invest. The product cycles don't work that way," he said.
Lee added that Singapore Airlines has a strong balance sheet to support the investment.
While the new cabin products include upgrades across all four classes, the investment in First and Business Class seats is significantly higher because of the cost of the seats and the technology involved.
Lee said the airline expects premium travel to remain a significant part of its business, although it does not disclose the revenue contribution from premium versus non-premium cabins.
"We are confident that premium travel will continue to be a big part of our business as it is today," he said.
The airline has also decided to introduce First Class on its A350-900 ultra-long-range (ULR) aircraft, which operate direct services from Singapore to the US.
Lee said the decision was driven by strong demand for First Class on these routes.
"The A350 First Class is a fairly specific decision taken around a specific aircraft. It's not all on the A350s where we will put a First Class. It's only on our ultra-long-range A350s. These are the A350s that we fly from Singapore to the US direct. And definitely, we do see a strong demand for First Class on those routes," he said.
Also read: Singapore Airlines to invest over S$2 billion in premium cabin revamp, debuts First Class on ultra-long-haul A350s
The new cabin products will progressively enter service from the second half of 2027.
The 41 retrofitted A350s will feature the new Business Class seats, while First Class will be introduced on the A350-900ULR fleet for the first time. The new Boeing 777-9 aircraft will feature all four cabin classes.
The new First Class product will feature private suites with sliding doors, companion dining and centre seats that can be converted into a double bed.
The new Business Class seats will offer improved ergonomics, greater privacy and full-flat beds measuring up to 79 inches. Premium Economy and Economy will also receive redesigned seats and upgraded entertainment systems.
With more than S$2 billion being committed to the new cabins, the question is whether passengers will eventually pay more for the upgraded experience.
Lee, however, said the airline does not determine ticket prices based on investments in products and services.
"In general, we don't price our airfares based on the investments that we make in products and services for our customers. Airfares are a function of demand and supply," he said.
He added that the airline does not look at the investment as a standalone project with a specific return target.
"Rather, it is taken as a whole. We invest because we want to keep the loyalty of our customers. We want to keep them coming back to us. And if they do so, ultimately, that will mean a strong bottom line. So that's where we get our returns," Lee said.
For now, Singapore Airlines has no plans to extend the retrofit programme to other aircraft types in its existing fleet. Lee said the airline's current decision was limited to the 41 A350s.
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