SIA banks on premium service in budget-travel era

A well-groomed young woman gently pours steaming tea into a cup inside a mock-up plane cabin as an instructor urges her to smile and make eye contact.

"Okay good job, keep it going, but remember not too much as they might want milk in the tea," trainer Philip Cheong tells her.

Nearby, giggles fill a brightly lit room as a cluster of equally-young women carefully wash their faces and settle back in their seats.

"Feel your skin, is it softer, smoother? Okay, we are now going to the next step and apply the toner," makeup consultant Shera Begum says as male members of the team watch attentively from the sidelines.

Welcome to the sprawling cabin crew training facility of Singapore Airlines (SIA), where the flight attendants that made the carrier famous for service are drilled in the finer arts of hospitality in the air.

In an era of cheap, no-frills travel, SIA has overhauled its marketing strategy to put fresh emphasis on its famed cabin service with the iconic "Singapore Girl" in a figure-hugging batik uniform at the forefront.

For SIA, the stakes have never been higher now that the carrier finds itself under fierce assault in the premium-travel segment from the likes of Emirates and Cathay Pacific.

SIA announced a profit of Sg$1.09 billion ($819 million) in the year to March 2011 on revenues of Sg$14.5 billion, reinforcing its status as one of the world's most profitable airlines.

It flew 16.65 million passengers during the period.

Airline analysts estimate that 40 percent of SIA revenues come from first- and business-class travellers who demand high levels of service, so nothing is left to chance during the 13-week training course for new cabin crew.

- 'Singapore Girl' makes a comeback -

Harking back to an earlier marketing strategy, SIA launched a global advertising campaign in February with the "Singapore Girl" as the main theme instead of new aircraft or luxurious amenities like high-tech seats.

The airline brushed aside criticism from some quarters that the 'Singapore Girl' campaign is sexist and outmoded.

"She represents not just the Singapore Airlines air stewardess, but qualities that all our cabin crew - male and female - possess," SIA commercial vice president Mak Swee Wah said.

Adrian Pring, a London-based analyst with business consultancy Brand Union, said the return to the "Singapore Girl" campaign was a strategic move for SIA.

"As more airline companies, particularly the up-and-coming Middle Eastern carriers, began taking delivery of the A380, or similar modern aircraft, SIA's ability to differentiate through 'hardware' waned," he added.

"So, with costs fluctuating and everyone flying the same equipment, an important place to attempt to differentiate is through the customer experience, underpinned by the people that will facilitate and bring the experience to life," Pring said.

In 2007, SIA became the first airline to operate the Airbus A380, the world's largest passenger plane, but other carriers have since acquired the "superjumbo" and the global recession hit hard the following year.

Now that the high-spending passengers are coming back, SIA is going all out for their business by playing up its cabin service.

"It reinforces the view that when it comes to premium flying, it is the choice for many business passengers," said Shukor Yusof, an analyst with Standard and Poor's Asian Equity Research.

- Weeding-out process -

About 60 percent of SIA's more than 7,000 cabin crew are women, mostly from Singapore and Malaysia.

Each recruitment exercise held in Singapore typically draws 1,000 applicants. The airline said it has no fixed quota for each intake and hires cabin crew on merit.

Recruits, whose average age is 24, are taught the basics of social etiquette, personal grooming, passenger handling and meal service, including food preparation and wine appreciation.

New flight attendants are only given five-year contracts to start with, enabling SIA to refresh the crew based on criteria such as "a customer-oriented service attitude," said Nicholas Ionides, the airline's spokesman.

Ionides said those who constantly make the grade can work a total of five five-year contracts during their career.

The weeding-out process effectively gives SIA a younger cabin crew than rival carriers, industry watchers say.

According to Singapore's Straits Times, most SIA female flight attendants are grounded between their late 30s and early 40s.

Their union is now bargaining for greater job security with a minimum flying career of 20 years, according to a recent report in the newspaper.

While trying to hold on to its position in the premium segment, SIA is not taking its chances on the other end of the market after watching the spectacular growth of the budget airline sector.

SIA announced in May that it will launch within a year a separately managed budget airline with different branding to tap into growing Asian demand for low-cost travel over longer distances, a market dominated by Malaysia's AirAsia X.

But premium travel is expected to remain SIA's most profitable business for years to come, with the "Singapore Girl" leading the charge.