A dedicated transformation office is conducting the review, aimed at reshaping the business “that continues to deliver high-quality products and services, though with a significantly improved cost base and higher levels of efficiency”, it said in a statement Thursday (May 18).
SIA is following in the footsteps of the other marquee Asian carrier Cathay Pacific Airways, which has embarked on a three-year revamp to cut costs after reporting its first floss in eight years. SIA, which is under pressure from regional discount carriers and Middle-Eastern rivals, said in February that 2017 will be a challenging year as passenger and cargo yields — a key measure of profitability — remain under stress.
“Similar to Cathay, evidently, the pressure from competition and the lack of a domestic market” are hurting SIA, said Mr Joshua Crabb, head of Asian equities at a unit of Old Mutual Plc.
Shares of SIA — the only Asian airline to have flown the Concorde and the first in the world to fly the A380 superjumbo — have risen 11 per cent this year, lagging behind the 15 per cent gains for the Bloomberg Asia Pacific Airlines Index.