As the brewing trade battle between the US and China threatens to slow demand for air freight, the market also is likely to cool as demand gets in line with supply, according to the CEO of Singapore Airlines. “From a business perspective, we would like to see countries around the world to work together to grow the economy, rather than contributing to the slowdown,” Goh Choon Phong said. Last year “was a great year for cargo,” Goh said, as an unanticipated jump in demand outpaced capacity. Yet “even without these aspects of world-trade impact, you will be expecting people to put in capacity,” he said at Bloomberg’s headquarters in New York. As capacity and demand are more balanced, “you will also see some pressure on yield.” His comments shed light on another potential threat to cargo rates as carriers brace for a possible US-China trade war that could undermine a market that saw demand rise since Q4 2016. Asia-Pacific airlines control 37% of the global air-freight market, and Singapore Airlines has seven Boeing 747-400 cargo planes in its fleet. Meanwhile, Goh said, Singapore Airlines is well-positioned to contend with rising fuel costs. “We have a fairly consistent hedging strategy basically to manage, not to speculate, but to manage the volatility of oil prices,” he said in the interview, broadcast Friday in Singapore. “We’re fairly well hedged at the moment.”<br/>
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Singapore Airlines said Thursday it expected to transfer some jets from its SilkAir regional airline to budget carrier Scoot, allowing it to compete more effectively against low-cost rivals like AirAsia Group and Lion Group. The plan comes after the carrier announced last month it would absorb underperforming SilkAir into the parent brand after 2020 when a program to upgrade cabins at a cost of more than S$100m gets under way. Singapore Airlines has been undertaking a three-year transformation program designed to cut costs and boost revenue amid competition from Chinese and Middle Eastern rivals and low-cost carriers. Scoot recently began listing job ads for Boeing 737 jet pilots despite operating a narrowbody fleet of rival Airbus A320s. Singapore Airlines said Thursday that it expected to transfer some of SilkAir’s 737s to Scoot to help optimise the overall group’s network, but it declined to provide further details such as the number of planes involved. As part of the transformation program, it has already transferred routes to five destinations in Southeast Asia from SilkAir to Scoot.<br/>