SIA to continue global expansion

SIA to continue global expansion

Agence France-Presse, Singapore

Singapore Airlines (SIA) must continue to spread its wings
across the globe despite recent turbulence in the industry, its
chief executive said.

Cheong Choong Kong said in a New Year's message to staff seen
Wednesday that expansion overseas was key to increasing returns
because Singapore's domestic market was too small for the
airline, one of the biggest in Asia.

SIA could post its first full-year loss in the current
financial year ending in March 2002 due to the impact of the
travel industry slump sparked by the Sept. 11 terrorist attacks
in the United States, and a debacle in SIA's investments in Air
New Zealand, he said.

"There is no denying that our mission has suffered a major
setback but we have always warned that the path to globalization
is strewn with risk," he said in his message published in this
month's issue of the SIA newsletter, Outlook.

"The alternative of carrying on as usual, with our fortunes
reliant solely on operations based in Singapore, would mean
stagnation and declining returns on capital," he said.

Virgin Atlantic, which is 49 percent owned by SIA, suffered
from the battering of the trans-Atlantic route.

Last year, SIA also saw its 25 percent stake in Air New
Zealand dwindle to 4.5 percent after the New Zealand government
rescued the airline from near-bankruptcy following the collapse
of wholly owned subsidiary Ansett Australia.

Ansett's collapse led to a writedown of S$300 million (US$163
million) in SIA investments in Air New Zealand.

"This makes the task of keeping financial year 2001-2002 out
of the red even more difficult," Cheong said.