I might be no airline guru, but even I have heard of Singapore’s pride & joy Singapore Airlines and regional arm SilkAir. But to be fair, who wouldn’t? Though that’s not the point.

Anyway, being the self-professed number one fan of the airline company (totally not because Kimberly Chia worked as an air stewardess there), I was pleasantly surprised to see that a merger between SIA & SilkAir isn’t just a possible option, but actually happening.

So what’s the context? What’s the deal? What’s the hype? We dig out the dirt, and let you see the grave – I mean information.

Because goodness me, people need more information nowadays with all the social media influenza going on.

1. Aircraft cabin upgrades

As part of plans to join up with fellow comrade Singapore Airlines (SIA), SilkAir will be undergoing some significant upgrades of its cabin products to smoothen the transition process.

According to SIA, the SilkAir upgrade programme will involve an investment of more than $100 million, which will be utilised in the investment of new lie-flat seats in business class and the incorporation of seat-back in-flight entertainment systems in both business and economy class.

This, in essence, will ensure “closer product and service consistency” across the SIA Group’s full-service network.

2. 2020

While aircraft cabin upgrades are expected to commence only in 2020 due to lead times required by seat suppliers and complicated, arduous certification processes we don’t really need to know, the actual merger will only materialise after a quoted number of aircraft have been installed with the necessary cabin products.

So if you’re a SilkAir fanboy who’santi-SIAA for some reason, don’t grieve yet. Save your tears for a couple of years later, when SilkAir totally fizzles out.

3. Staff Complications

So, would a SilkAir steward or stewardess’s job be in jeopardy?

After Singapore Airlines CEO Goh Choon Phong’s post-results briefing, he has revealed that no employee will be made “redundant”.

“Our view is that with the integration and the growth opportunity, there should be more opportunities for our staff to go into different roles.”

What if there are overlaps? Or sectors that are already full and do not require additional personnel?

“However, where there are overlaps, we will look at how to redeploy staff and also how to provide re-training. This is not something new for us, we have gone through mergers between Tiger and Scoot.”

So yeah, if you’re a SilkAir employee…

Your rice bowl’s still intact, so no worries.

4. It’s not the first merger between the group’s carriers

In July 2017, Tigerair was ‘swallowed’ by Scoot in their attempt to drive commercial and operational synergies between both airlines. Incidentally, both budget carriers are also owned by Singapore Airlines.

5. Optimisation 

According to SIA, there will also be transfers of routes and aircraft between the different airlines in the portfolio in order to coincide with ongoing efforts to optimise the SIA group’s network.

“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 SIA’s chief executive officer 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.”

Did someone just say positive? Sounds good to me.

6. Tactical move

If you’re wondering why the move, look no further because Mr Goh holds the answer:

According to the man, the SilkAir brand isn’t as recognisable in areas like Europe compared to here in Asia, and as such, the merger will empower SIA to better position the brand in those regions.

“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.”

And that, ladies and gentlemen, is a true tactical move on the airline’s part. Pep Guardiola who?

7. SilkAir

The carrier currently operates a fleet of 11 Airbus A320-family aircraft and 22 Boeing 737-800 and 737 MAX 8 aircraft.

It is in the process of transitioning to an all-737 fleet, and caters to 49 destinations in 16 countries.

Well, I guess that’s pretty impressive. But seeing how I can swallow 50 hours of food in 16 minutes flat I think I’m even more impressive.

But let’s not compete because we’re on totally imbalanced fields right now. It would be way too unfair to them.

8. Ever-increasing ambitions

SIA has expressed ambitions to grow its operating fleet size to 117 for SIA by 31 March next year, compared with 107 as of end-March this year; they also intend to up SilkAir’s fleet size by one to 33, and Scoot by eight to 48. The size of the operating cargo fleet is presumed to remain the same.

In case you’re unaware of the sheer projected scale here, here’s an example:

In available seat kilometres, this would equate to 5 percent for SIA, 9 percent for SilkAir and 17 per cent for Scoot for the financial year (FY) 2018/2019 compared to the previous financial year.

Group capital expenditure on aircraft wise, it’s expected to remain fairly stable, at S$5.7 billion for FY 18/19, $5.9 billion for FY19/20 and S$5.8 billion for FY 20/21.

But you probably didn’t even read it, because who goes through hefty financial amounts that are not in your bank account?

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