Corporate Governance and Risk Management

Question 1

Blue Sky Limited (“Blue Sky”) is a budget airline that is listed on the Main Board of the Singapore Stock Exchange. It operates in the Asia Pacific region.

In 2020, Blue Sky’s passenger carriage had dropped by 85% as air travel demand was severely curtailed by the COVID pandemic worldwide. The viability of the business was at stake. In March 2021, Blue Sky reported its first annual net loss in its 20-year history of S$ 35 million for the 12 months ended 31 December 2020.

In April 2021, the group decided to diversify its business to the restaurant and catering business.

The new business group will operate under the brand name “Makan Sutra”. The core business of the Makan Sutra group (MSG) will be the operation of food and beverage (F& B) outlets and food catering. MSG will employ 500 staff from Blue Sky who would otherwise be redundant and retrenched if the COVID pandemic situation does not improve for a prolonged period.