SilkAir Gives Up Routes To Scoot Ahead Of Singapore Airlines Merger

Before SilkAir is formally folded into the Singapore Airlines brand, it’s undergoing something of a transformation. Various routes are being transferred from them to the Singapore Airlines Group’s (SIA) ultra-low-cost airline, Scoot.

singapore airlines and silk air
The SIA Group say that bringing SilkAir into the Singapore Airlines brand will help them compete with neighboring carriers

The move is part of a three-year program at Singapore Airlines to refine and strengthen the group, and to stave off competition from Chinese and Middle Eastern carriers. CEO of Singapore Airlines, Gon Choon Phong, said of the changes,

“The route review will strengthen the SIA Group for the long term, with the right vehicles in our portfolio of airlines deployed to the right markets.”

Other route changes and a handover of aircraft from SilkAir to Scoot has also been announced, as SIA start putting the wheels in motion for a merger with SilkAir.

 

The SilkAir – Singapore merger

Announced back in May, SIA has decided to scale back SilkAir services with a view to eventually merging the brand into Singapore Airlines. The rapidly reducing profits at SilkAir contrasted starkly with the 150% rise in profits at the SIA Group, prompting a group-wide review of operations.

Singapore Airlines is in the midst of a three-year transformation program, designed to boost revenue and trim back costs. Competition from Chinese and Gulf carriers is fierce for the Singapore based carrier, and bringing SilkAir into the main brand, they say, will help them remain profitable.

Gon Choon Phong, promised these changes would be positive for their customers. As part of the announcement in May, he said:

“SilkAir has always played a critical role for SIA as a regional feeder. Even with the merger, it won’t detract from that role. However, we believe that with the merger and one single brand, it will make it much easier for customers to understand that both narrow body and wide body (planes) belong to the same organisation and brand.”

The merger will go ahead following a S$100m ($72m) upgrade to cabins across the SilkAir fleet. The upgrade promises to bring the narrowbody aircraft in line with the current full service offering from Singapore Airlines, including lie flat business class seats and seat back IFE in both business and economy.

Which routes will be transferred?

Altogether there will be 17 SilkAir routes handed over to Scoot over the course of 2019 and 2020. The specific routes and timings are as follows:

  • Luang Prabang – from April 2019
  • Vientiane – From April 2019
  • Coimbatore – Between May and October 2019
  • Trivandrum – Between May and October 2019
  • Visakhapatnam – Between May and October 2019
  • Changsha – Between May and June 2019
  • Fuzhou – Between May and June 2019
  • Kunming – Between May and June 2019
  • Wuhan – Between May and June 2019
  • Chiang Mai – From October 2019
  • Kota Kinabalu – From December 2019
  • Balikpapan – Between May and July 2020
  • Lombok – Between May and July 2020
  • Makassar – Between May and July 2020
  • Manado – Between May and July 2020
  • Semarang – Between May and July 2020
  • Yogyakarta – Between May and July 2020

With the last of the routes due to be transferred by July 2020, it’s clear how the timeline for the merger of SilkAir into Singapore Airlines is going to go.

Other notable changes at SIA

A few other changes have been announced too, as part of an overhaul of the SIA network.

Scoot will be suspending its service to Honolulu from June 2019. Currently, it operates a service four times weekly and has done since 2017. Flying Boeing 787s via Osaka, the lack of uptake on the Osaka to Honolulu route means it’s no longer profitable. Service will cease from June 2019.

As well as this, SilkAir’s three times a week Singapore to Mandalay route is being adjusted to a seasonal only service. The route will stop in March 2019 and is planned to resume in November 2019.

The end of an era

It’s a big change for SilkAir, who has been in the skies for over 40 years. Initially flying as Tradewinds, it was formed to provide flights for SIA’s exclusive package holidays. They weren’t rebranded as SilkAir until 1992, when they began to expand routes, purchase more aircraft and establish themselves as a standalone carrier.

Their latest full year earnings showed their profits had sagged from a healthy $27m in 2015/16 to just $3m in 2016/17. As a whole, the aviation industry has been struggling due to higher operating expenses and fuel price hikes.

They currently operate 11 Airbus A320s, 17 Boeing 737-800s and have five 737 MAX 8s in their fleet. There are a further 32 737 MAX 8s on order, which was due to be delivered from Boeing through into 2022. The Airbus narrowbodies are being phased out, and 14 of the 737-800s are due to be transferred to Scoot in the near future.

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