SINGAPORE: Singapore Airlines said Friday it will absorb its struggling premium wing SilkAir following a multimillion-dollar upgrade as part of a reform drive to stay competitive.
The move comes after the firm, facing tough rivalry in the high-end market from other full-service airlines and in economy class from budget carriers, last year consolidated its low-cost units TigerAir and Scoot into a single entity in a streamlining exercise.
SIA said it would stump up more than S$100 million ($74.5 million) on a cabin upgrade for the wholly owned subsidiary, including new “lie-flat seats” in business class and backseat in-flight entertainment in business and economy class.
The overhaul is expected to start in 2020 and the merger will take place after a sufficient number of aircraft have had their cabins redesigned, the firm added.
Friday’s announcement “is a significant development to provide more growth opportunities and prepare the group for an even stronger future,” SIA chief executive Goh Choon Phong.
Last year it embarked on a three-year transformation program in a bid fend off competition and defend its reputation as one of the world’s leading airlines.
SIA said Thursday the transformation has started to bear fruit, with group net profit climbing 148 percent to S$893 million in the year ended March 31.
But SilkAir, a full-fare carrier that flies largely to holiday spots across Asia, turned in the weakest performance in the group with operating profit tumbling 57 percent to S$43 million.
The merger “should have been done years ago because SilkAir has always been the weakest link within the SIA group,” said Shukor Yusof, an analyst with aviation consultancy Endau Analytics.
Shukor noted that SilkAir was losing to the competition because, as a premium airline, it charges full fares while a host of regional budget carriers sell tickets to the same destinations at a cost a fraction of the cost.
“For SIA, the cost of running SilkAir is very expensive,” he said.
“As a full-fare airline, flying to a niche resort destination is a very difficult market to make money from because the market these days is focused on carriers offering cheap fares. It’s all about costs.”
Singapore Airlines to absorb regional wing SilkAir after upgrade
Singapore Airlines to absorb regional wing SilkAir after upgrade
Stc Group issues US dollar-denominated sukuk with a total value of $2bn
RIYADH: Stc Group has issued US dollar-denominated sukuk with a total value of $2 billion across two tranches.
The group clarified that the issuance included the offering of $750 million in sukuk with a 5-year maturity at a yield of US Treasury plus 75 basis points, and an issuance of $1.250 billion with a 10-year maturity at a yield of UST plus 90 basis points, according to the Saudi Press Agency.
It noted that the total order book exceeded $8 billion across both tranches, with a coverage rate exceeding 4 times, and participation from over 300 investors in the subscription.
The issuance garnered strong demand from a broad and diverse base of international investors, reflecting solid confidence in the robustness and efficiency of stc Group’s business model and strategy.
This strategy is aimed at strengthening its digital leadership, seizing infrastructure opportunities, enabling massive projects, and contributing to the realization of Vision 2030 objectives, with a focus on achieving sustainable growth based on operational efficiency and maximizing shareholder value.
This issuance enhances stc Group’s access to international capital markets and solidifies investor confidence in the strength of its credit position.
It also supports its strategic role in accelerating the pace of digital transformation in the Kingdom and building a thriving digital economy.
