Singapore Airlines to re-integrate SIA Cargo division

Singapore Airlines to re-integrate SIA Cargo division

SINGAPORE: SIA Cargo, a wholly owned subsidiary of Singapore Airlines (SIA), will be re-integrated as a division within the SIA group, the national carrier announced in a media release on Friday (May 19). 

SIA said the re-integration will help improve efficiency, and is expected to be completed in the first half of 2018, after which SIA Cargo will become the airline's cargo division. 

"There will be no change to SIA Cargo's operations," the airline said. "Seven Boeing 747-400 Freighter aircraft will continue to be operated, while the cargo division will continue to manage the passenger aircraft ‘bellyhold’ space for SIA, SilkAir and Scoot." 

Bellyhold space refers to cargo stowed under the main deck of an aircraft. 

The majority of SIA Cargo's nearly 900 employees will be retained in the new cargo division, while some will be transferred to other divisions, the carrier said. Staff members without confirmed alternative job positions will be given "opportunities for staff development" within the group, SIA added. 

The move comes after SIA on Thursday reported a net loss of S$138 million for its fourth quarter, with earnings dragged down by a S$132 million provision for SIA Cargo over a competition law case in Europe.

SIA was among a number of airlines to face penalties in the European Commission case, which said the carriers coordinated their actions on surcharges for fuel and security affecting cargo services over six years. 

SIA Cargo was a division of SIA until July 2001, when it become a separate subsidiary.

"At the time, it was in the process of growing its fleet to up to 17 747-400Fs, and it was better suited to carry out its expansion as a standalone all-cargo airline," SIA said, adding that the airfreight market has since seen structural changes.

SIA Cargo now has seven aircraft in its freighter fleet, while the proportion of revenue from passenger aircraft bellyhold capacity has increased significantly, SIA said. It noted that SIA Cargo's overall capacity still grew by 4 to 5 per cent in each of the past two financial years despite the smaller freighter fleet.

The move is not expected to have a material impact on its financial performance in the 2017/18 financial year, the airline said.

Source: CNA/dl