SINGAPORE AIRLINES HANDS SILK AIR A NEW LEAN BEGINNING
Singapore Airlines told the world on Friday that it’s re‑imagining its premium wing, SilkAir, after pouring more than S$100 million (US$74.5 million) into a major cabin upgrade. This move is part of a broader overhaul aimed at keeping the airline sharp in a market that’s getting bite‑sized by rivals.
Why the Shake‑Up?
“We’ve been fighting a double‑whammy: high‑end competitors for business travelers and cheap budget carriers for economy.”
Key steps in the plan:
- Upgrade the cabin – new “lie‑flat seats” in business class, plus refreshed back‑seat entertainment now available in both business and economy sections.
- Committed to S$100 million for the makeover, all within the wholly‑owned subsidiary.
- Start the rollout in 2020, with the merger following once enough aircraft have been revamped.
Executive Goh Choon‑Phong summed it up: “This move is a major step toward seizing fresh growth opportunities and building a stronger future for the group.”
A Quick Look Back
Last year, the airline consolidated its low‑cost arms – TigerAir and Scoot – into a single entity, cutting redundancies and streamlining seat inventory. The SID 3‑year transformation kicked off in hopes of countering rising competition and protecting SIA’s prestige as a top global carrier.
After a year, the effort shows rewards: the conglomerate’s net profit jumped 148 % to S$893 million for the fiscal year ending March 31.
Silk Air’s Performance Dilemma
Despite the overall gains, SilkAir yielded the weakest results. Its operating profit fell 57 % to only S$43 million as it flies mainly to holiday spots across Asia. Analysts say the airline’s “full‑fare” model struggles against budget carriers raking in the same routes with a fraction of the cost.
“SilkAir has always been the group’s weak link,” pointed analyst Shukor Yusof of Endau Analytics. “Running a premium carrier to niche resort destinations is tough when the market’s beating on low prices. Costs are the battle yardstick.”
