SIA is Singapore's pride, one of the most successful airline in the world. It has faced many crises but survived. It quickly rebounds from making losses to making profits and regularly rewards its shareholders and employees with good dividends and bonuses. The successes did not come easy. It is not just good reputation but good management, setting high standards of service, quality and safety records and many others. On its own, it is very unlikely that such a well managed airline would go under. It did faced an internal crisis in the 70s and LKY threatened to close it down. The troublemakers got the message and the airline returned to normal service.
Success breeds success, but also breeds conceit. It is very tempting to keep on expanding, acquisition etc to increase revenue and profit. Nothing wrong with that. But the world is not Singapore. Singaporeans have this tendency to think the world is like Singapore, all decent and proper, plays by the rule, no cheating, no foul play. The way Singapore imports foreigners in the millions and fully trusts their credentials, papers and qualifications is bizarre. Singapore takes them at face value, with little checking or too difficult to verify, so never mind. If the foreigner can outtalk or outwit the Singaporean interviewers it is ok. Fake qualification or no qualification, can work good enough. Can you imagine with the millions of foreigners, many are fakes and cheats, Singapore could hardly fish out the cheats and fakes. But I digress.
SIA has a record of mergers and acquisition, buying up poorly run and money losing airlines. This is not a bad thing, a common thing by corporations seeking to spread their wings. With SIA's good management practices and standards, it should be easy to revamp the operation and services of the new acquisition and turn them around to become better managed and profitable businesses.
In reality this is not that simple, not always the case. Things are not that simplistic. The culture and politics of the acquisition could be very messy and beyond control. If SIA has no ability to take full control of the management, to run the new acquisition into another little SIA without interference, it is better to play safe and avoid the risk. Remember, SIA is public money and have to be careful with how money is invested, and has to answer not only to the shareholders, but to the employees and the govt. SIA is best to play it safe in M and A.
Some countries are very good in playing dirty, attract investments and then run down the corporation and making big losses, and demand the investors to pick up the tab, pay for the losses. Paper gains or losses are very easy to cook. They make money from stupid investors by raping the investors. And if the stupid investors refuse to pay up, they will sell off the corporation to their left hand with big losses to wipe out the investors. Either way, stupid investors will lose and lose and eventually becoming an ATM without being wiser.
The world is not as clean, decent and proper like sanitised Singapore when management is above board and operates under proper rules and regulations. Many countries make easy money by cheating and raping their stupid investors. And suckers are born every day, and thinking they are not suckers. Period.
