Singapore Airline Ltd to Undergo Transformation: 3 Must-Read Quotes from Management
Singapore Airlines Ltd (SGX: C6L) is looking to transform its business.
For its financial year ended 31 March 2017 (FY16/17), the airline operator reported a 55% decline in profit. During Singapore Airlines’ fiscal fourth quarter earnings presentation, the management team shared more information about the company’s business transformation. Here are three quotes investors may not want to miss.
Singapore is not enough
In his opening speech, Singapore Airlines’ chief executive officer, Goh Choon Phong, said:
“This is again not new but underscores our belief that the Singapore market itself is not going to be sufficient in the long term. There are geographical limitations on what you can serve from Singapore, hence the multi-hub strategy.”
In the statement above, Goh provided some insight on why he thinks Singapore Airlines needs to change. Change is not something new, though. He added:
“So you can see that over the last few years, five, six years, we actually have recognised that the environment has changed and we have responded with very different strategies from what we used to do before – to branch out into LCCs [low cost carriers], to go overseas, to set up bases for future growth platforms, to look at other revenue streams.
And I think all those things that we have done actually put us in a good foundation to now go on to the next phase of our transformation.”
In the quote above, Goh highlighted some of the changes that Singapore Airlines has undertaken over the years. These include branching out to low cost carriers and looking for other revenue streams.
But why change now? Goh continued:
“So why? Because the portfolio now actually allows us to fundamentally relook at our network, our product, our deployment of aircraft, and to question and to be able to have the ability to now really say this is a market for what kind of vehicle and how do we grow from there.
And with that, we have embarked in a very determined manner on our next phase to build on this platform, to go into the next phase of our transformation.”
Singapore Airlines currently has four airline brands (Singapore Airlines, SilkAir, Scoot and Tigerair; Tigerair is set to operate under the Scoot brand in July) with a total fleet of around 171 passenger aircraft. In his statement above, Goh provided some insight on how he and his colleagues are thinking about Singapore Airlines’ transformation process. Management will be looking at what assets the company has, and how they can drive growth from there.
Investors will have to wait for more details to be shared before any conclusions can be drawn.