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Rumour: SilkAir to be Merged into Singapore Airlines

All the signs point towards a merger of SilkAir with the parent airline, sometime in 2018.

Edit 18th May 2018: Singapore Airlines formally announced the merger of SilkAir into SIA this morning. See our article for full details and analysis.

After posting a shock loss of S$138 million for the Q4 2016-17 period, the Singapore Airlines Group embarked on a turnaround plan, led out of a specially created “Transformation Office”. According to Reuters, the company has identified 56 separate initiatives to help it cut costs and operate more efficiently as part of the process. Fuel savings, better rostering of crew and less food waste are just some of the means being implemented.

But of greater interest is that part of that turnaround in August this year was to consolidate the financial operations of full-service regional subsidiary SilkAir into the Singapore Airlines office.

The group has also been embarking on some airline consolidation, already budget carriers Tigerair and Scoot have been merged into a single carrier, retaining the branding of the latter, and soon Singapore Airlines Cargo will be integrated into the mainline operation.

This leaves SilkAir sticking out like a sore thumb. This recent CAPA article suggests that serious consideration will be given by the group to a merger between SilkAir and the parent airline as part of the ongoing group review.

It also suggests that SilkAir could upgrade it’s recently enlarged Business Class cabin on the 737 MAX with a flat-bed seat, possibly to match the regional business product being planned for the 787-10.

SilkAir’s new business class space on the 737 MAX 8 is generous, and more than sufficient for a ‘regional flat-bed product’ replacement. (Photo: SilkAir)

This would allow the group to have a consistent regional business seat on longer flights, with the 737 MAX able to provide capacity on “thinner demand” routes up to seven hours from Singapore, while the 787-10 and regional A350 aircraft service the higher demand flights.

Flat-bed business on a 737 MAX?

It sounds a bit illogical, given the space seats like this occupy, to install them on a narrow body aircraft. SIA / SilkAir wouldn’t be the first to do so however, several US carriers like jetBlue, Delta Air Lines and American Airlines already have flat-bed seats on their A321 aircraft for transcontinental flights, and although the A320 family cabin is a little bit wider than the 737, flydubai recently became the first 737 MAX operator to install a flat-bed business seat in the aircraft.

flydubai 737 MAX Biz (flydubai)
flydubai were the first airline to install flat-bed business class seats on their Boeing 737 MAX aircraft. (Photo: flydubai)

Malaysia Airlines also announced earlier this year that it will install a flat-bed business class product, with each seat featuring direct aisle access, on their 737 MAX aircraft being delivered from 2021. That’ll be some interesting competition close to home, which SIA surely won’t ignore.

What’s interesting about the flydubai configuration though, is that it occupies exactly th