Singapore Airlines’ underperforming regional arm SilkAir will disappear within two years.
It will be absorbed into the mainline carrier’s network after 2020 following a $75 million cabin upgrade programme.
It forms a major part of SIA’s transformation programme aimed at cutting unnecessary costs and boosting revenue.
SilkAir’s all narrowbody fleet will get seatback in-flight entertainment units and lie-flat seats in business class.
SIA recently posted its best financials for years but SilkAir was the weak spot, with profit down by more than a half.
SilkAir has been suffering against budget carriers which typically serve the regional routes it operates.
Singapore Airlines CEO Goh Choon Phong says there is little brand awareness of SilkAir outside the Asia Pacific region.
"SilkAir has always played a critical role for SIA as a regional feeder. However, we believe that with the merger and one single brand, it will make it much easier for customers to understand that both narrow body and wide body (planes) belong to the same organisation and brand."
SilkAir serves 49 destinations in Asia Pacific and has already seen some routes transferred over to SIA’s budget brand Scoot.
Goh said no redundancies of SilkAir staff are expected once the brand disappears.
