Singapore Airlines announces reintegration of SIA Cargo as group division

Gladys Abbott
May 20, 2017

The airline group also announced that SIA Cargo, a wholly-owned subsidiary of SIA will be re-integrated as a division within the SIA group.

SIA also reported a net loss of S$138 million in its fourth quarter January-March 2017 compared to a S$225 million net profit in the same period a year ago.

Nevertheless, strategic policies to address structural changes are starting to demonstrate positive results, it added.

"A dedicated Transformation Office is conducting a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes, to better position the Group for long-term sustainable growth across its portfolio of full-service and budget airline operations".

Singapore's national carrier reported a net loss of SGD138.3 million in its fiscal fourth quarter, which compares to a net profit of SGD224.7 million for the same period a year ago.

For the full year, parent carrier Singapore Airline's operating profit was S$386 million, down 20% YOY.

SIA said the new aircraft would enable the group to expand its network and boost competitiveness in both the full-service and low-priced segments. They noted that although load factors received a lift, this had come at the expense of yields.

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Some of the current jobs would have to be redesigned because some jobs may not be relevant anymore, said Mr Goh.

Touching on the outlook for yields, SIA's executive vice-president (Commercial) Mak Swee Wah suggested that a pickup in oil prices could help stabilise the situation.

"For a group of staff for whom alternative job positions have yet to be confirmed, placement opportunities will be facilitated elsewhere within the SIA Group", said SIA. Seven Boeing 747-400 Freighter aircraft will continue to be operated, while the Cargo Division will continue to manage the passenger aircraft "bellyhold" space for SIA, SilkAir and Scoot.

SIA was among many carriers to face penalties by the European Commission, which said the companies ran a global scheme affecting cargo services in the continent by coordinating their actions on surcharges for fuel and security without discounts over six years.

Most of SIA Cargo's almost 900 employees will be retained in the new cargo division, while some will be transferred to other divisions, said Mr Goh.

SIA Cargo was launched in 2001 as a separate company to operate up to 17 B747 freighters. Despite the smaller freighter fleet, SIA Cargo's overall capacity still grew 4%-5% in each of the past two financial years. This has forced SIA Cargo to right-size its fleet.

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