Singapore Air To Merge With Regional Carrier SilkAir

Evarado Alatorre
May 18, 2018

He said the SilkAir brand is not as well known in areas like Europe compared to here in Asia and as such, the merger will allow SIA to better position the brand in those regions.

More than $100 million will be invested to upgrade SilkAir's cabins with new lie-flat seats in Business Class, and install seat-back in-flight entertainment systems in both Business Class and Economy Class.

Also on the cards is a transfer of routes and aircraft between different airlines in the portfolio as SIA continues moves to optimize its route network.

The merger will take place only after a sufficient number of aircraft have been fitted with the new cabin products, and specific details will be announced progressively as the programme develops and timelines are finalised, it added.

But SilkAir was a weak spot, reporting a full-year operating profit of S$43 million for the 12 months ended March 31, down 57 percent from a year earlier.

The move is part of the SIA group’s optimisation efforts
The move is part of the SIA group’s optimisation efforts

This translates to projected capacity growth, in available seat kilometres, of 5 per cent for SIA, 9 per cent for SilkAir and 17 per cent for Scoot for FY2018/2019 compared to the previous financial year.

Aircraft cabin upgrades are expected to start in 2020.

Singapore Airlines on Thursday topped market expectations by reporting a 148 percent rise in full-year net profit to the highest level since 2011, as passenger and cargo revenue rose and the transformation programme produced early results.

Through the upgrade, Singapore Airlines seeks to close a gap with rival Cathay Pacific Airways Ltd, whose regional arm, Cathay Dragon, operates jets with cabins more similar to its parent than the wider gulf between Singapore Airlines and SilkAir products.

SilkAir was launched in 1989 as Tradewinds the Airline, initially focusing on holiday destinations in Southeast Asia. The parent airline swung into the black with an operating profit of S$137 million, versus a loss of S$41 million a year ago, buttressed by higher revenue. It was renamed SilkAir in 1992.

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