Singapore Airlines Doubles Down on the E-Commerce Trend by Carriers

Singapore Airlines has quietly rolled out a digital e-commerce subsidiary called Pelago in recent months. While the subsidiary only has a staff of 50 today, it reflects a broader trend of airlines trying to use their brand names and customer bases to stretch into the online sales of other products and services.

In November, Singapore Airlines [SIA] CEO Choon Phong Goh described Pelago during an investor call as “a brand new business that’s been set up within SIA” with a goal of “extending the SIA experience from the skies to the ground.”

The subsidiary’s CEO, Siddharth Shanker, has hired dozens of content producers to build a trip planning service that currently focuses on experiences and activities. After a beta product launch in October 2020 and continued product iteration, Pelago officially launched in Singapore in June. Consumers can use and earn miles in the airline’s loyalty program KrisFlyer by buying activities via Pelago. The brand offers more than 200 experiences, such as workshops in how to make cocktails or be a beekeeper.

Reservations for the Level 33 Microbrewery Tour in Singapore are bookable via Singapore Airlines’ new digital platform. Source: Pelago.

Singapore’s move is the latest by an airline to broaden its scope beyond flying planes. While airlines have upsold passengers on extras for years, what’s new is the hands-on approach to sourcing and marketing the content instead of using affiliate deals.

In nearby Malaysia, AirAsia Group announced in October that in the second quarter “it successfully pivoted the airline into a digital lifestyle company, anchored on travel.” Earlier this month, AirAsia Digital acquired Gojek’s Thailand operations in a deal that valued AirAsia’s budding superapp at $1 billion ahead of a planned public listing through a blank check company.

In Japan, ANA Group has been working since March to launch ANA X as a kind of superapp for the Japanese market only.

“We’re trying to break away from the aviation business only, expanding non-aviation revenue on a super app covering not only out-of-the-ordinary services, such as flight or travel, but also ordinary life services,” said Shinichi Inoue, ANA X President, at a March news conference.

In the U.S., JetBlue Airways debuted in March Paisly, a travel website upsell passengers on products such as rental cars, hotels, and theme park tickets.

Pelago Is a Bet on Travel Experiences

A view of the Floral Fantasy, part of Dale Chihuly’s first major garden exhibition in Asia, called Glass in Bloom, open since May in Singapore. Pelago is the only online travel agency to offer tickets. Source: Pelago.

Pelago has gained some traction in an exclusive deal that makes it the only online travel agency to sell tickets to acclaimed artist Dale Chihuly’s first major garden exhibition in Asia. The brand is the “official discovery partner” for the Chihuly exhibition in Singapore, and also the assigned platform for its associated events, such as yoga and art jamming.

As of today, Pelago only markets experiences in Singapore, but it intends to grow abroad.

“As travel gradually normalizes, we look forward to bringing our unique and curated experiences in the destinations consumers travel to with SIA,” said Shanker, CEO of Pelago.

Pelago also fits into Singapore Airlines’ broader pattern of dabbling in e-commerce. For some time, the airline has been touting the use of its frequent flier program KrisFlyer as a way to buy non-flight products. Its Kris+ app can be used to pay for shopping, meals, and everyday purchases at several partner merchants in Singapore. Consumers can also earn miles if they use the app to make many everyday purchases. Integration of the app with Pelago seems likely.