SIA CEO reveals driving force behind merger with SilkAir

SilkAir will soon cease to exist once the merger is complete

As Singapore Airlines (SIA) and sister airline SilkAir inch closer towards merger date, SIA’s CEO Goh Choon Phong has revealed the motivation behind the cessation of the regional SilkAir brand.

Speaking at the Skift Forum Asia on Monday, Goh explained that the move is meant to “simplify the model” for SIA by halving the number of brands under the group.

SilkAir will soon cease to exist once the merger is complete

Previously, SIA had a portfolio of four brands: 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 longhaul destinations.

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

Scoot then underwent a brand refresh, with the aim of complementing the main SIA brand. This was a good move, Goh shared, adding that LCCs now account for more than 50 per cent of air traffic in Asia.

And with the SilkAir merger, Goh believes that SIA is in a position of competitive efficiency. He shared that the company’s model is to “keep things pure” and with SIA and Scoot offering products on two different ends of the spectrum, it’ll give the company a competitive edge and “win in those segments”.

“Anyone in between will have a hard time,” Goh concluded.

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