SilkAir to take delivery of first 737 in February

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SilkAir is gearing up to take delivery of its first Boeing 737-800 early next month and intends to put the jet into service from 20 February.

The aircraft will be deployed to destinations including Kuala Lumpur, Penang, Phuket and Medan, its chief executive Leslie Thng told reporters at a press conference in Singapore.

The Singapore Airlines' regional carrier's second 737 will meanwhile be put into service on 17 March, and be used on services to Siem Reap, Danang, Davao, Cebu and Kochi.

Thng says SilkAir will take delivery of eight 737s in 2014, and at the same time, retire four of the oldest Airbus A320s in its fleet. Its 737s will have 162 seats in a two-class configuration: 12 in business class and 150 in economy.

The carrier finalised a commitment for 54 Boeing 737s – including 31 of the re-engined 737-8s – in November 2012, swinging it away from being an all-Airbus operator. It also has purchase rights for an additional 14 aircraft.

The 23 737-800s will arrive within the next three years and the carrier should get its first Max aircraft by the first quarter of 2018. Meanwhile, SilkAir's fleet of 24 Airbus aircraft will be progressively phased out, with the transition to an all-Boeing fleet to be completed by the end of the decade.

"The 737 Max will increase our flying radius to about 6.5 hours. That would mean opportunities out there to consider flying slightly further, something which we currently can't do," says Thng.

Asked why SilkAir decided to switch to the 737, Thng says that careful considerations pointed to the Boeing jet as the "most suitable aircraft" to meet the airline's expansion plans in the years ahead.

"The conclusion was that even with the additional costs related to transiting, we'll still be in a better position to expand as well as retain profitability in the coming years."

He adds that with the incoming aircraft, SilkAir will more than double its fleet by the end of the decade and the aim is to grow annual capacity by double digits.

In the first half of its 2013-14 financial year, the carrier’s capacity as measured by ASKs increased by 14%. Passengers carried, however, only increased by 3.6%, resulting in a 5.1 percentage point drop in load factor to 69.3%. Its operating profit meanwhile fell by 41% to Singapore dollars (S$) 21.8 million ($17 million).

"Going forward, we will continue to improve and adapt, catering to the evolving needs of travellers in Asia... we will focus on expanding out network to unique destinations especially in key markets such as China, India and Indonesia," says Thng.