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Under the agreement, SIA will acquire 70% of DFASS-SATS, currently equally owned by DFASS (Singapore) and SATS Asia-Pacific Star, which will each retain a 15% stake.
How the partnership will work
DFASS will be the joint venture’s exclusive supplier, while SATS will manage onboard fulfilment. The joint venture will enter into a management contract with DFASS and SATS to leverage the expertise of the two companies but will operate as a separate omni-channel business unit with dedicated staff.
The technological platform will be developed in conjunction with DFASS exclusive partner, AOE, a non-aviation digitalisation company.
The joint venture will initially operate under the existing KrisShop and Scootalogue inflight sales brands but with the aim to expand the offer to third parties.
Scootalogue is the inflight retail catalogue of SIA’s low cost subsidiary Scoot and KrisShop is SIA’s inflight retail. DFASS-SATS currently operates KrisShop for SIA and regional arm SilkAir, as well as the Scootalogue programme under contract arrangements.
“Transforming the current model”
DFASS executive vice chairman Roberto Graziani said: “Being a company which has been setting the pace in the inflight retail business for the last 25 years, we are very much looking forward to transforming the current model into a modern, powerful and consumer oriented omni-channel experience.
“DFASS is really excited to start this new initiative that, we are convinced, will positively disrupt the travel retail business, together with partners that place customer experience at the heart of their strategy and with which we have built a successful long-term relationship.”
A winning trinity
SIA chief executive Goh Choon Phong said: “This is a win-win-win partnership among three great companies which we expect will help us substantially grow our travel-related retail business.
“The joint venture will bring together strengths of all three partners – the SIA Group’s customer base of more than 30 million travellers per year and our growing KrisFlyer frequent-flyer programme, as well as SATS’ airport and logistics expertise across Asia and DFASS’ extensive supplier network and retail experience.”
Alex Hungate, president and chief executive of SATS, added: “This new venture brings our longstanding partnership into the digital age. Passengers will benefit from relevant, exclusive shopping opportunities, customised for them personally, and integrated seamlessly into their overall customer experience.”
Subject to the successful completion of due diligence and other conditions being met, the joint venture agreement is expected to be finalised in the third quarter of 2018.
