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Singapore Airlines to transfer several SilkAir routes to budget arm Scoot

Singapore Airlines to transfer several SilkAir routes to budget arm Scoot
A SilkAir plane sits beside a Singapore Airlines plane at Changi Airport in Singapore October 4, 2017. REUTERS/Edgar Su/File Photo   -   Copyright  EDGAR SU(Reuters)
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SINGAPORE (Reuters) – Singapore Airlines Ltd <SIAL.SI> said on Thursday its budget carrier Scoot will take over several routes from regional airline SilkAir over the next two years, ahead of a plan to absorb underperforming SilkAir into the parent brand.

Scoot will also transfer some of its services to existing destinations served by Singapore Airlines and SilkAir, including to some Indian cities.

The changes are expected to take place between April 2019 and the second half of 2020, Singapore Airlines said.

SilkAir will also transfer 14 Boeing 737-800s to Scoot.

Singapore Airlines said it would fold SilkAir into itself after 2020 when a programme to upgrade cabins at a cost of more than S$100 million (£57 million) gets underway.

The airline operator has been undertaking a three-year transformation programme designed to cut costs and boost revenue amid competition from Chinese and Middle Eastern rivals and low-cost carriers.

“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,” Chief Executive Goh Choon Phong said.

The changes include the suspension of Scoot’s services to Honolulu, one of its three long-haul routes, due to weak demand.

(Reporting by Aradhana Aravindan, Editing by Sherry Jacob-Phillips)

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