SIA Cargo~ Lean, mean and ready for the turbulence ahead

It’s a challenging time for air cargo carriers: Over-capacity in key markets and the US domestic slow down now rippling across the global economy are exerting intensive pressure on yields, while on the cost side, record high fuel prices are biting hard at the bottom line. While Singapore Airlines (SIA) Cargo is not immune to […]


It’s a challenging time for air cargo carriers: Over-capacity in key markets and the US domestic slow down now rippling across the global economy are exerting intensive pressure on yields, while on the cost side, record high fuel prices are biting hard at the bottom line. While Singapore Airlines (SIA) Cargo is not immune to these pressures, a strategic review of its network and capacity management has readied the carrier for a ahead.

"It’s a challenging business environment," SIA Cargo president Goh Choon Phong starts in an interview with Payload Asia. "From the yield side the industry is under pressure largely because a fair bit of capacity has been added in the major markets – whether it’s India,China or elsewhere.

"You can see that there is a fair bit of excess capacity in general and then there is also the effect of movement to sea freight," he said.

Goh, who joined SIA’s cargo subsidiary about a year-and-a-half ago from group’s passenger side, says this same yield pressure which has been a feature of 2007 will continue through this year, but with the added feature of the US slowdown.

"If the US slows down further or worse, slips into recession, Asian goods will obviously be effected and that is something we have to watch quite closely," he said, noting that an already weakening US dollar has made Asian exports more expensive.