Singapore Airlines is struggling to keep up with its competitors when it comes to passenger traffic growth.

Singapore Changi Airport’s traffic grew 13% last year to 42 million, but SIA’s passenger numbers grew at a slower rate – 1.8% to 16.6 million from 16.3 million. By comparison, Singapore low-cost carrier Jetstar Asia posted a 44% increase in passenger numbers to 2.6 million from 1.8 million. Jetstar Asia added capacity in 2010, while SIA cut capacity 0.3%.

In terms of capacity coming into its network in the immediate future, SIA has eight Airbus A380s on order. But these are to replace the seven Boeing 747-400s that are due to leave the fleet by end of March 2012. The eight A380s are due to arrive in that time-frame.

The carrier also has 20 Boeing 787-9s and 20 Airbus Airbus A350-900XWBs on order, with first deliveries originally set for 2011 and 2012 respectively. But first deliveries of the A350s have slipped to the fiscal year ending 31 March 2014. Also, SIA plans to phase out its A330s, on lease, once it gets the A350s.

As for the 787s, an SIA spokesman was unable to say which year SIA’s first 787 will come, as “we remain in discussion with Boeing on delivery dates.” But “first delivery will certainly not be in 2011,” he adds.

The 787s were ordered as replacements for its older 777s, mostly the 777-200ERs, and to develop new long-haul routes, but the delay in the 787 program has adversely affected those plans. SIA is continuing to phase out the 777-200ERs although at a slower pace than originally scheduled. However, phasing out some 777-200ERs, with no 787s coming in, means there is a danger SIA may reduce capacity further.

It has no new 777s on order, because it let its options on Boeing 777-300ERs lapse in 2009. This may have been seen as a prudent move at the time, because it was the height of the global financial economic crisis. But the market rebounded strongly in 2010.

Boeing assigned the slots to other carriers, some of which are SIA’s competitors. Cathay Pacific Airways, Etihad Airways and Garuda Indonesia have 18, nine and 10 777-300ERs on order respectively, says Ascend data.

“SIA in some ways is at a crossroads as to where it wants to position itself in the coming years,” says Standard and Poor’s (S&P) Singapore-based aviation analyst, Shukor Yusof. S&P, like Aviation Week, is part of the McGraw Hill Group of Companies. Cathay Pacific has been outperforming SIA in terms of share price, Shukor adds.

SIA also has smaller competitors tapping the growth in the market. Malaysia Airlines’ low-cost carrier Firefly has no competition on the four routes it serves between Singapore and Malaysia. Firefly managing director, Eddy Leong, says Firefly’s turboprop operation has profit margins higher than the industry average. Its most successful route is Singapore-Kuala Lumpur Subang. Subang Airport is closer to the city than Kuala Lumpur International Airport, so the service has proven popular with business travelers. Firefly started July 2009 with a thrice-daily service and has since increased it to seven-times daily. There is a strong possibility Firefly will add more capacity on routes to Singapore, in light of the fact it plans to add two more ATR 72s this year and three next year.

Industry executives say SIA group has taken note of Firefly’s success and is evaluating whether it too should move into turboprop operations, rather than leave this growing market entirely to Firefly.

Embraer is also speaking to SilkAir to persuade it that the Embraer 170/190 is the best solution for boosting frequency on existing routes and developing new routes.