Hermann Freidanck, the food and beverage director of Singapore Airlines
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Consistency--a trait rare in the airline industry--has been a hallmark of SIA's management. CEO Cheong Choong Kong, 61, who will leave the airline in June, has run the show for nearly two decades, having worked his way up from an assistant manager for reservations. After taking over in 1984, he moved aggressively to stretch the airline worldwide; he was the main proponent of Singapore's successful push to become the first Southeast Asian country to sign a bilateral open-skies agreement with the U.S, in 1997. This treaty lets the airline fly to any American city and has inspired similar agreements throughout Asia.
Cheong stunned the industry in 1991 when he told McDonnell Douglas that its new, much anticipated wide-body aircraft, the MD-11, did not meet SIA's long-haul performance specifications. Cheong canceled a $3.1 billion order and opted for the Airbus A340-300 instead.
The incoming CEO, Chew Choon Seng, 56, is a 30-year employee of SIA and a longtime colleague of Cheong's. He is expected to continue Cheong's course with little fanfare.
An unequaled reputation for service and luxury among the recession-resistant rich--and careful pricing that makes its economy seats just dear enough--is helping SIA gain market share in today's sluggish economy. The airline is trimming economy-class fares only on routes like Newark to Amsterdam, where it most wants to gain share.
The airline's goal is to make you forget you're flying at all. In business class, the seats not only are generous but also transform into the longest and widest lie-flat beds in the sky (with privacy screens for protection from nosy neighbors). Each passenger gets an on-demand entertainment system (no more waiting for your film choice to begin). Unlike other airlines, SIA almost never debases the value of its upper-class seats by granting free bump-ups, even to its frequent flyers.
The airline spends about $20 per passenger for food and beverages in economy, $40 in business class and $50 in first class. Industry experts estimate that this is at least 10% higher than industry averages. Dom Perignon flows in first, Piper Heidsieck in business; the ice creams in economy are Haagen-Dazs and Ben & Jerry's.
All this spending seems to work its intended magic: attracting plenty of business travelers willing to pay more than what other airlines charge. SIA says it has never suffered an unprofitable year, and its unit cost--6.4ยข a seat mile--compares favorably with that of the most efficient U.S. carrier, Southwest.
Even as overall premium-fare business travel has withered over the past year, superior service remains in strong demand on marathon flights from the U.S. and Europe to Asia. And long-haul routes are far cheaper to operate per passenger mile than, say, the Richmond, Va., to Memphis, Tenn., flight that domestic airlines provide. While profit margins for all Asian carriers are relatively high, SIA's has been 50% higher, according to an industry analyst, than Qantas' and double that of Japan Airlines.