SIA EMBARKS ON 56 COST-CUTTING PLANS

Airline reviewing work processes and operations as part of three-year plan to become more competitive

SINGAPORE

SINGAPORE Airlines Ltd (SIA) is pursuing more than 50 cost-cutting initiatives, including reducing fuel burn and reviewing its relationship with key suppliers, as part of a three-year plan to make the airline more competitive, a newsletter to staff shows.

Both SIA and Hong Kongbased rival Cathay Pacific Airways Ltd have come under pressure due to growing competition from Chinese and Middle Eastern rivals. Both also lack domestic flight markets to help offset the international competition.

SIA set up a dedicated transformation office to review its strategy in May after a surprise fourth-quarter loss although it has not released a cost-cutting target.

In a staff newsletter, chief executive officer (CEO) Goh Choon Phong said the airline was working on 56 initiatives, which also included more self-service options for customers and reducing in-flight food and beverage wastage.

Since the review was launched, SIA has handed two of regional arm SilkAir’s routes to budget carrier Scoot, merged part of SilkAir’s finance team with its parent and offered unpaid leave to cabin crew.

CAPA Centre for Aviation chief analyst Brendan Sobie said SIA should consider the more radical move of merging SilkAir with its parent as part of the review.

“It would generate efficiencies and ensure a consistent product at the full service end of the market,” he said.

The carrier has already merged budget arms Scoot and Tigerair Singapore and folded its cargo arm back into SIA.

SilkAir CEO Foo Chai Woo said

on Wednesday the company planned to keep the carriers separate for now, but declined to comment on whether a future merger could be ruled out.

Cathay has been more aggressive in its restructuring efforts as

it tries to rebound after reporting its worst first-half loss in more than 20 years. It has cut 600 jobs as part of a review aimed at reducing HK$4 billion (RM2.17 billion) in costs over three years. Reuters

BLOOMBERG PIC Singapore Airlines chief executive officer Goh Choon Phong says the airline is working on 56 initiatives, which include more selfservice options for customers and reducing in-flight food and beverage wastage.