Just one day after Singapore Airlines reported a net profit of S$181.8 million (US$135.2m) for the fourth quarter ended March 31, reversing from a loss of S$138.3 million a year ago, the carrier made this surprising announcement: starting in 2020, it will spend more than S$100 million (€63 million) on cabin upgrades for its regional wing SilkAir and eventually merge it with the parent airline.
The move comes one year into Singapore Airlines’ three-year cost-cutting transformation programme, as competition from low-cost carriers and Chinese and Middle Eastern rivals intensifies, Reuters
reported.
Merging SilkAir into Singapore Airlines (SIA) will improve connectivity across the combined fleet's wide- and narrow-body planes, SIA management said, adding that SilkAir was still seeing
"healthy" demand for business class seats in the region.
The merger, which will take place only after a sufficient number of aircraft have been fitted with the new cabin products, continues SIA's brand consolidation and will leave the company with just
two carrier brands - SIA itself and Scoot. Scoot and Tigerair earlier merged in 2017.
Re-integration of SIA Cargo intended
SilkAir operates a fleet of 11 Airbus A320-family aircraft and 22 Boeing 737-800 and 737 MAX 8 aircraft. It is currently transitioning to an all-737 fleet and serves 49 destinations in 16
countries.
SIA said it expects to grow its operating fleet size to 117 for SIA by March 31 next year, compared with 107 as of end-March this year; increase SilkAir's fleet size by one to 33, and Scoot by
eight to 48. The size of SIA's freighter fleet - seven B747-400Fs - is expected to remain the same. On May 2017, Singapore Airlines announced that SIA Cargo would be re-integrated as a division
within the SIA group, a move which is expected to be completed in the first half of 2018.
Nol van Fenema
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