SINGAPORE — SilkAir, the regional wing of Singapore Airlines (SIA), will be merged into its parent company after a massive cabin products upgrade programme.

SilkAir will undergo a "significant investment programme" to upgrade its cabin products, which will ultimately culminate in its merger into SIA, said the national carrier in a press release on Friday (May 18) morning.

Both SilkAir's business and economy class cabins will be upgraded. Travellers in business class will be able to travel on lie-flat seats.

Meanwhile, seatback entertainment will be installed on both SilkAir's business and economy classes.

The cabin upgrade programme will comprise an investment of more than S$100 million.

"This will ensure closer product and service consistency across the SIA Group's full-service network," the press release noted.

SIA chief executive Goh Choon Phong said: "Singapore Airlines is one year into our three-year Transformation Programme and today's announcement is a significant development to provide more growth opportunities and prepare the Group for an even stronger future.

"Importantly, it will be positive for our customers. It is another example of the major investment we are making to ensure that our products and services continue to lead the industry across short-, medium- and long-haul routes."

The upgrades will commence in 2020, "due to lead times required by seat suppliers, including to complete certification processes", said SIA.

Once a sufficient number of SilkAir's fleet have been retrofitted with the new products, the merger will take place.

Specific details will be announced progressively as the programme develops and timelines are finalised, said SIA.

It also said that there will be transfers of routes and aircraft between the different airlines in its group, but did not specify which routes, or airlines. SilkAir is part of the group, as is low-cost carrier Scoot.

SilkAir, founded in 1989 as Tradewinds the Airline, currently flies to 49 destinations, with a fleet of 33 aircraft.

A day earlier, SIA posted a profit of S$893 million in the financial year that ended on March 31 — the highest since 2011, and a 148 per cent increase from a year ago.

The performance was largely attributed to a higher operating profit and an impairment of the Tigerair brand and trademarks last year, among other factors. Tigerair merged into the Scoot brand in late 2016.

SilkAir's operating profit fell by S$58 million, due to higher spending which outpaced revenue gains. Total revenue rose by 3 per cent, led by higher passenger carriage.

Noting that the move to fold the SilkAir brand into SIA was “timely”, Associate Professor Lawrence Loh from the National University of Singapore (NUS) Business School said: “Beyond the branding considerations, it makes perfect sense to have an unified umbrella to serve the intensely competitive air passenger markets.”

Assoc Prof Loh, who is also Director at the Centre for Governance, Institutions & Organisations at NUS, said that the regional market, especially within South-east Asia and China-India, has “high growth potential”.

“It will help if the same brand is used to link destinations seamlessly not only within the region but also to the world,” he added.