Singapore to Take Over SilkAir Subsidiary, Install Lie-Flat Business Class on 737s

May 18, 2018

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Singapore Airlines will fold its underperforming, wholly owned regional subsidiary SilkAir into the full airline after 2020, when the fleet of SilkAir single-aisle jets undergoes a $74.5 million upgrade.

By the time the set of upgrades — totaling more than S$100 million, or $74.5 million USD — to SilkAir’s fleet of aircraft is complete, it will be folded into Singapore Airlines. More specifically, SilkAir, which currently operates a fleet of 11 Airbus A320s and 22 Boeing 737s (both 737-800s and 737 MAX 8s), will be outfitted to offer lie-flat seats in business class, as well as seatback in-flight entertainment for both business class and economy class travelers. It’s in the process of transitioning to an all-737 fleet, as it has another 32 MAX 8s on order.

Upgrades won’t start on the SilkAir aircraft until 2020, a delay caused by the required lead times from seat suppliers, including the certification process. Singapore said in an announcement that it will only complete the merger with SilkAir “after a significant number of aircraft have been fitted with the new cabin products.” So, it’s likely that we won’t see a combined Singapore-SilkAir carrier until at least 2020 — if not later.

At this point, exact details on what type of seats will be installed in its business class cabin are unknown. But Singapore says that details will be announced as timelines are finalized.

“Singapore Airlines is one year into our three-year Transformation Programme and today’s announcement is a significant development to provide more growth opportunities and prepare the Group for an even stronger future,” said Singapore CEO Goh Choon Phong. “Importantly, it will be positive for our customers. It is another example of the major investment we are making to ensure that our products and services continue to lead the industry across short-, medium- and long-haul routes.”

Singapore’s three-year Transformation Programme is one that has been designed to cut costs and boost revenue across its entities, amid growing competition both from low-cost carriers within the region, as well as its full-service Middle Eastern competitors. The move to merge with SilkAir is one that Singapore hopes will reduce losses. On Thursday, Singapore announced its results, including a 148% rise in full-year net profit — its highest level since 2011, according to Reuters. However, its SilkAir operation was the downfall to its earnings — its full-year operating profit was down 57% from the year prior.

SilkAir currently serves 49 destinations in 16 countries. Where it has struggled most is in the short-haul market, where low-cost carriers have dominated.

This also marks the first time in decades Singapore Airlines will operate narrowbody aircraft. Currently, Singapore operates a fleet only comprised of long-haul, twin-aisle aircraft — Airbus A380s, A330s and A350s and Boeing 787s and 777s. It flew single-aisle planes in the past including the Boeing 707 and 757; when it retired the 757s in 1990, it was left with a fleet of only widebodies.

Featured image by Wikimedia Commons.

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