SIA chief leaves Virgin Australia board

10 Dec 2015 by Clement Huang

Despite maintaining a 22.2 per cent stake in Virgin Australia, it has been reported that Singapore Airlines (SIA) chief executive Goh Choon Phong has decided to step down from the Australian carrier’s board.

Goh’s departure comes on the heels of a similar move by Etihad Airways chief executive James Hogan, who left the board back in February after failing to attend a single board meeting. In contrast, the SIA head has been an active board member, having attended eight of the 13 meetings in the last financial year.

According to the Sydney Morning Herald, the reason behind Goh leaving the board is due to the heavy travel commitment, and comes at a time when SIA is attempting to focus its efforts at home.

The Star Alliance member recently began attempting to acquire all those shares of its low-cost subsidiary, Tigerair, that it does not own. Singapore’s Channel News Asia reported early last month that SIA would be offering Tigerair shareholders S$0.41 (US$0.30) per share, which represented a premium of 32 per cent on the LCC’s then traded price of S$0.31 (US$0.22).

By owning more than 90 per cent of Tigerair’s shares, SIA would be entitled to delist and privatise the budget carrier. While the SIA Group currently controls a 58 per cent stake in the airline, Goh believes that Tigerair’s “development potential is limited without deeper integration with the Group to build a strong foundation for growth over the long term”.

SIA has also strengthened ties with fellow Star Alliance member Lufthansa. The two carriers will operate key routes between Singapore and Europe on a revenue-sharing basis, in addition to expanding their existing codeshare ties.

Furthermore, the two airlines have signalled their intention to cooperate on key markets in Europe, Southeast Asia and Australia. By coordinating flight schedules in those markets, customers will be able to benefit from more convenient connections. 

The agreement will also cover SIA subsidiary Silk Air and Lufthansa subsidiaries Austrian Airlines and Swiss.

Other collaborative efforts are expected to be introduced throughout 2016, including joint fare promotions, aligning corporate programmes and exploring enhancements to existing frequent flyer programme ties.

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Clement Huang

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