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SIA CEO explains merger with SilkAir

Four brands under one roof was “not the most efficient way to address connectivity”, so they’ve been narrowed down to two.

As Singapore Airlines and its subsidiary SilkAir inch closer towards a merger date, SIA CEO Goh Choon Phong has revealed the motivation behind the cessation of the regional SilkAir brand, TTG Asia reports.

Speaking at the Skift Forum Asia in Singapore on May 27, Goh explained that the move was meant to “simplify the model” for the group by halving its number of brands.

Previously, Singapore Airlines had a portfolio of four brands, namely the two LCCs Tigerair and Scoot and two full-service brands, SilkAir and SIA.

SilkAir served short- to medium-haul flights within the region, while SIA served medium- to long-haul destinations.

Four brands under one roof is “not the most efficient way to address connectivity”, Goh admitted. In July 2017, the company merged Tigerair into Scoot.

Scoot then underwent a brand refresh, with the aim of complementing the main Singapore Airlines brand. This was a good move, Goh said, explaining that LCCs now account for more than 50% of air traffic in Asia.

“Competitive efficiency”
With the current SilkAir merger, Goh said he believed that Singapore Airlines was in a position of competitive efficiency. The company’s model is to “keep things pure”, he said, and with Singapore Airlines and Scoot offering products on two different ends of the spectrum, it will give the group a competitive edge and “win in those segments”. “Anyone in between will have a hard time,” Goh added.

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