Singapore Airlines to boost digital investment to improve revenue, cut costs

By Dewey Sim and Jamie Freed

SINGAPORE (Reuters) - Singapore Airlines Ltd will invest "hundreds of millions" of dollars in digital technology over several years as part of a broader transformation designed to remain competitive against global rivals, its chief executive said on Monday.

The investment is aimed at boosting revenue and reducing maintenance costs and travel delays, CEO Goh Choon Phong told media, adding that the carrier would tie up with four Singapore research agencies.

"Competition has become much more intense and we are very mindful that we need to reinvent ourselves and find new ways to distinguish (Singapore Airlines) from others in order to stay ahead of our competition," he said.

Goh declined to provide more detailed figures or an exact timeline for the investment plans, which he said had already begun.

Airlines around the world are looking to harness financial benefits from their data collection to help lift revenue at a time of low ticket prices.

Other initiatives the premium Asian carrier has announced so far as part of the three-year transformation programme include adding more seats to its Airbus SE A380s, shifting some routes to low-cost carrier Scoot and merging the finance teams of the flagship airline and its short-haul arm SilkAir.

The airline, like its Hong Kong-based rival Cathay Pacific Airways, has been struggling against mounting global competition from Chinese and Middle Eastern rivals and low-cost carriers, without domestic flights to underpin their earnings.

Singapore Airlines said it would invest in automated technology research to lower maintenance costs and decrease aircraft delays, under a collaboration with the Agency for Science, Technology and Research (A*STAR).

National University of Singapore (NUS) will aid the carrier in tackling other business challenges such as revenue management, where it plans to improve forecasting to better understand demand patterns.

The airline's staff will also be invited to pitch digital ideas, with initial grants of S$5,000 being given to suggestions deemed worthy of further testing, Goh said.

Singapore Airlines could potentially boost earnings by S$800 million ($610.8 million) a year if it could successfully collect and monetise passenger data, Corrine Png, the CEO of transport research firm Crucial Perspective, forecast in a report published on Jan. 23.

"This will return Singapore Airlines to its glorious days of earning over S$1 billion net profit a year which would be a significant positive share price driver," she said.

Singapore Airlines reported a S$360 million net profit in the financial year ended March 31, 2017.

($1 = 1.3097 Singapore dollars)

(Reporting by Dewey Sim and Jamie Freed; Editing by Amrutha Gayathri)