SIA’s reputation tarnished by delayed premium economy launch

It will affect passengers travelling from September to March.

Singapore's flag carrier's reputation is being jeopardised after the announcement that its installation of premium economy seats on the A380 aircraft would be delayed due to impediments the seat installation program.

According to a report by UOB Kay Hian, the move would affect passengers travelling from September 15 to March 16. UOB also warns of a limited impact to yields due to the delay.

SIA, however, assures its passengers that they are working on the installation program as quickly as possible.

"Customers with ticketed bookings who are affected by the delays will be contacted progressively by Singapore Airlines or travel agents to offer alternative travel arrangements," SIA said in a statement.

"Singapore Airlines wishes to apologise to affected customers for the inconvenience caused," SIA said.

Despite this setback, analysts are still expecting a positive impact on SIA's 2QFY16 earnings due to weaker S$ against US$.

"The Singapore dollar has weakened 4.0% against the US dollar since 30 Jun 15. Every 1% decline in the Singapore dollar against the US dollar could result in about $28m of incremental earnings based on SIA’s FY15 earnings sensitivity," UOB Kay Hian said.

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