SIA says it may start new low-cost carrier

SINGAPORE: Singapore Airlines (SIA), its finances strained by the Severe Acute Respiratory Syndrome (SARS)-triggered fall in passenger traffic, said yesterday it may set up a new low-cost airline rather than convert its regional arm, SilkAir, into a budget carrier. 

Asia’s biggest airline by market value said a specially formed task force reporting to the chief executive had been working on the idea of a low-cost, no-frills airline. A decision on the project would be made this year. 

SIA, which is 56% owned by the Singapore government, launched a global campaign on Monday to cut fares by half for travel to Singapore for the period June 16 to Aug 31 in a bid to revive passenger traffic. 

The airline saw its overall load factor fall 13.6 points to 58.7% in April from 72.3% in the same month a year ago – the fourth consecutive drop on a year-on-year basis. 

SIA's move to consider starting a new low-cost carrier comes after it revealed plans to raise cash through a debt issue, triggering speculation it may seek up to US$1bil. 

Shares in the airline closed 50 cents higher at S$10.90 yesterday. The shares have risen nearly 7% since the start of the year but still underperformed the key Straits Times Index by about 3% during the period. 

As early as February, the airline had said it could launch a regional no-frills carrier in a very short period if competitors tried to launch one. – Reuters  

  • Another perspective from The Straits Times, a partner of Asia News Network. 

    For more foreign business news click here


  • Article type: metered
    User Type: anonymous web
    User Status:
    Campaign ID: 1
    Cxense type: free
    User access status: 3

    Did you find this article insightful?


    Next In Regional

    MMEA tracking Vietnamese fishing crew who escaped after their boats sank
    Covid-19: Cases up by 2,154, bringing total to 310,097 (updated daily)
    BN parties never agreed to appeal to King for Parliament sitting during Emergency, say MCA and MIC presidents
    Crude oil price surge pushes FBM KLCI above 1,600
    Bollywood, streaming giants on edge as Amazon gets flak for hurting religious beliefs in India
    YouTube cancels Myanmar military-run channels, pulls videos
    Bank Negara forex reserves higher at US$109bil
    China deals fresh blow to tech giants in reach for data
    Japan supercomputer shows doubling masks doesn’t help prevent viral spread
    South Korea envoy hopes to wrap up talks with U.S. on defence costs

    Stories You'll Enjoy