DFASS, SATS and Singapore Airlines (SIA) have agreed to establish a joint-venture to engage in travel-related retail operations starting with programmes on SIA (KrisShop) and its low-cost subsidiary carrier Scoot (Scootalogue). 

Under a Points of Agreement, SIA intends to acquire 70% of DFASS-SATS Pte Ltd, which is currently equally owned by DFASS (Singapore) and SATS subsidiary SATS Asia-Pacific Star Pte Ltd (APS).

DFASS (Singapore) and APS will each retain 15% under the terms of the agreement.

The share sell agreement, joint-venture agreement and other definitive agreements are expected to be finalised in the third quarter of 2018.

This is subject to the successful completion of due diligence, various conditions being met and necessary approvals being obtained.

DFASS will be the exclusive supplier of the joint-venture while SATS will be in charge of managing on board fulfilment.

The joint-venture will enter into a management contract with DFASS and SATS to leverage the expertise of the two companies in the specific fields and operate as a separate omni-channel business unit with dedicated staff.

The technological platform will be developed in conjunction with exclusive DFASS partner AOE, a leading non-aviation digitalisation company.

JOINT-VENTURE OFFER

The joint-venture will offer travellers inflight duty free and duty paid goods and pre-order services with on-board and ground-based deliveries, initially under the existing KrisShop and Scootalogue inflight sales brands.

The aim is to expand the scope to other interested parties.

DFASS-SATS Pte Ltd currently operates KrisShop for SIA and regional arm SilkAir, as well as the Scootalogue programme for SIA’s low-cost subsidiary Scoot, under contract arrangements.

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 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.”

Singapore Airlines CEO Goh Choon Phong added: “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.”

SATS President and CEO Alex Hungate remarked: “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.”