Singapore Airlines – SilkAir Merger On Track

Singapore Airlines confirmed this week that the SilkAir merger remains on track despite the current crisis. This means the merger should be complete by early- to mid-2021, with Singapore Airlines operating its first 737 at that time. Here’s what the airline is planning for the newly-merged carrier.

Singapore Airlines Silk Air
The SilkAir brand will be merged into Singapore Airlines by early next year. Photo: Getty Images

On track

The current crisis has had a significant impact on airlines, with most delaying or shelving any long-term plans. However, Singapore Airlines is pushing ahead with its SilkAir merger, which it first announced in 2018. The merger will see SilkAir’s routes being distributed between Scoot and Singapore Airlines, with the latter also taking over SilkAir’s fleet of 737s.

In an analyst briefing this week, CEO Goh Choon Phong said, “We can begin to expect SIA to operate its first narrowbody plane sometime by the first quarter of next year [2021]. This will give us the flexibility of deploying widebody or narrowbody operations on routes, depending on the demand.

With the first Singapore Airline 737s taking to the skies in early 2021, we can expect the merger to be completed by the middle of 2021. The incoming fleet is a mix of ex-SilkAir 737-800s and MAXs, as well as new 737 MAX’s coming straight from Boeing. However, Singapore Airlines is also investing in bringing its narrowbody offering on par with its widebody ones.

New product onboard

As mentioned, routes previously flown by SilkAir are being divided between low-cost arm Scoot and full-service Singapore Airlines. To fly under the Singapore livery, the ex-SilkAir 737s are being retrofitted with a new lie-flat business class cabin. This ensures a seamless transition between narrowbody and widebody aircraft, without a substantial drop in the onboard product.

Thompson Aero Vantage layout
The next Singapore Airline 737s will see new lie-flat business class seats. Photo: Thompson Aero

The cabin upgrade has become even more important due to the current crisis. As mentioned in the briefing, Singapore Airlines hopes to deploy the aircraft on routes with lower demand to reduce expenditure. To make such schedule changes, an upgraded 737 is required to meet the airline’s standards. Considering Singapore Airlines has seen load factors in the 20% region due to this crisis, a lower capacity plane would be ideal right now.

More flexibility

The main reason to continue with the SilkAir merger is to offer the carrier more flexibility while navigating this crisis. The addition of a narrowbody fleet allows the airline to deploy the right aircraft to the required markets, an issue other all-widebody airlines like Cathay Pacific and Emirates have faced too. The phasing out of the SilkAir brand will also reduce overall expenditure, another important benefit.

Singapore Airlines can now deploy the 737 to markets with low demand instead of widebody aircraft. Photo: Singapore Airlines

The next few months will see more 737s delivered to Singapore Airlines as it plans to slowly grow its operations into 2021. However, the airline will likely continue to see significant losses in the coming quarters due to the drop in demand.

What do you think about the upcoming merger? Could a Singapore Airlines 737 replace widebodies on some routes? Let us know your thoughts in the comments below!