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SCT-2012-03 - 1ST 777-200 DELIVERY
SCT-2012-05 - EXTERIOR MARKINGS
SCT-2012-06 STARTS OPS
SCT-2015-01 - 1st 787-9.jpg
SCT-2015-07 - 787-9 Maju-lah.jpg
SCT-2015-11 - SIA to MEL 787.jpg
SCT-VISIT HONG KONG
Formed in 2011 and started operations in 2012. Low cost carrier (LCC) long-haul, scheduled & charter, regional and international, passenger & cargo jet airplane operations.
25 Airline Road, Changi Airport, Singapore
Singapore (Republic of Singapore) was established in 1965, it is an island covering an area of 618 sq km, its population is 4 million, its capital city is Singapore, and its official language is English.
December 2011: Singapore Airlines (SIA)’s new long-haul, low-cost subsidiary, "Scoot (SCT)," has chosen Sydney (SYD) as its first international destination. Scoot (SCT) will fly daily between (SYD) to Singapore (SIN) from mid-2012 on a 777-212ER. This is a route that neither AirAsia X (ASX), which would obviously like to serve it from Kuala Lumpur but cannot get its flight rights, nor Jetstar (IMU) would like the competition. Singapore Airlines (SIA) itself also flies the lucrative Singapore - Sydney route, with its A380. Also Qantas (QAN) and British Airways (BAB) working together, and even Virgin Atlantic Airways (VAA). More destinations are expected to be announced shortly, with China and then Europe targeted for 2013.
Scoot (SCT) will commence operations with four 777-212ERs with fares up to -40% below legacy carriers. It will operate from (SIN) Terminal 2, not the low-cost carrier (LCC) terminal.
Being very aware of the significance of the competition from (SIA)'s just launched "Scoot (SCT)," AirAsia X (ASX) has initiated its first flight to Osaka, the birthplace of Kabuki theater. The real theatrics however, are happening in the air with Japan undergoing a low-fare revolution. (ASX) already serves Tokyo Haneda.
March 2012: Scoot (SCT) has set June 26 as the launch date when it will start operations with two 777-200ERs taken over from its parent Singapore Airlines (SIA) and offering five weekly flights from Singapore Changi International airport (SIN) to Coolangatta/Gold Coast airport (OOL) as well as a daily, Singapore Changi International airport (SIN) - Sydney Kingsford Smith airport (SYD) service. (SCT) will launch 4X-weekly, Singapore (SIN) - Tianjin Binhai International airport (TSN) 777 service beginning in the second half of 2012.
(SCT) received its first two 777-212ER airplanes, purchased from parent, Singapore Airlines (SIA). Both airplanes will undergo a heavy maintenance "D" check, have their interiors refitted with Scoot (SCT)’s cabin product and be painted in Scoot (SCT)’s livery before entering commercial service. SEE ATTACHED PHOTO - - "SCT-2012-03 - 1ST 777-200 DELIVERY." Photo shows Scoot (SCT) Head Flight Operations/Chief Pilot, Captain H C Rohan; (CEO), Campbell Wilson; and Cabin Services Head, Ng Ju Li with the first 777.
April 2012: Singapore Airlines’ (SIA)'s new medium- to long-haul low-cost carrier, Scoot (SCT) is taking off ahead of schedule with its inaugural flight from Singapore (SIN) to Sydney set for June 4, followed by (SIN) - Gold Coast on June 12.
“Our launch preparations continue at a fast pace and we’re delighted to be able to put earlier flights on sale,” said Scoot (SCT) (CEO) Campbell Wilson.
With an initial fleet of 4 777 airplanes, (SCT)'s 1st-year routes will link Australia, Singapore and China, with others to be announced.
Earlier, (SCT) named Darren Wright as its General Manager Australia.
May 2012: Singapore Airlines’ (SIA) is adding Bangkok to city destinations of its new medium- and long-haul budget carrier, Scoot (SCT).
The announcement raised eyebrows because the Singapore (SIN) - Bangkok (BKK) route is already one of the busiest in Asia, with Scoot (SCT)’s entry adding competition between different lines within the (SIA) family. (SIA) flies (SIN) to (BKK), as does Tiger Airways (TGR) in which (SIA) has a 32.84% stake.
“We have included Bangkok in Scoot (SCT)’s network because we know that there’s a demand and our guests have told us loud and clear that they want us to!” Scoot (SCT) (CEO) Campbell Wilson said.
“Introducing Bangkok to our network benefits not just our guests in Singapore, but also those in Australia and China, who can now connect through Singapore to Bangkok,” Wilson added.
The move also maximizes the utilization of Scoot (SCT)’s airplanes, he said.
Scoot (SCT) will launch services June 4 with an inaugural flight from Singapore to Sydney, followed by (SIN) - Gold Coast service on June 12. “Our 1st-year routes will link Australia, Singapore, and China. Our guests’ support will allow us to add more destinations (some new for a low cost carrier (LCC) and some old favorites),” said Wilson.
SEE ATTACHED - - "SCT-2012-05 - EXTERIOR MARKINGS."
June 2012: Singapore Airlines (SIA) new medium- to long-haul low-cost carrier (LCC) Scoot (SCT) launched its inaugural commercial flight from Singapore (SIN) - Sydney (SYD) June 4 with 400 guests aboard. The flight, which media reports said was delayed by 100 minutes due to a medical emergency and a technical glitch, touched down without further incident at (SYD).
(SCT) will begin daily (SIN) to (SYD) services June 6, Gold Coast (5x-weekly, June 12), Bangkok (daily starting in July) and Tianjin (4x-weekly, starting in August).
(SCT) (CEO) Campbell Wilson also announced plans to fly to Tokyo and Taipei in the 3rd quarter. “Taipei and Tokyo are in addition to our current announced routes, namely Sydney, Gold Coast, Tianjin and Bangkok.” Although there was no comment on expected numbers, (SCT) is considering other services as well.
(SCT)’s success on the new services will be watched keenly as the (LCC) market continues to expand.
(SYD) Airport (CEO) Kerrie Mather said, “We've seen how low-cost carriers (LCC)s have stimulated demand here and overseas and Scoot (SCT)'s daily service to Sydney will add +290,000 seats a year to this key growth corridor.”
(SCT), which competes with Air Asia (ASW) and Jet Star Asia (JSA), is marketing itself not so much as a low-cost, long-haul carrier but a change in the way people travel long distances. These changes include offering iPads to passengers after the carrier took out more than two tonnes of in-flight entertainment (IFE) equipment in a bid to save fuel, according to a "Bloomberg" report. Economy (Y) passengers will pay to rent the tablets, although they will be loaned free to business (C)-class customers, it said.
“The Apple tablets helped (SCT) cut -7% off the weight of planes obtained from parent Singapore Airlines (SIA) even after a +40% increase in seating” according to the report, citing (SCT) (CEO) Wilson as its source.
(SCT) has appointed Air System and Federal Transportation Company as its general sales agents in Japan and Taiwan, respectively. (SCT) plans to operate daily flights to Tokyo Narita and Taiwan Taoyuan later this year, subject to government approval.
July 2012: (IATA) Code: TZ. (ICAO) Code: SCO.
Scoot (SCT) will launch 3x-weekly, Singapore Changi - Taipei service on September 18, originally planned to commence in October. The service will increase to daily on October 29.
By 2016, Scoot (SCT) envisages a fleet of 14 777s.
September 2012: Scoot (SCT) has added China to its network by launching flights between Singapore (SIN) and Tianjin (TSN) near Beijing on August 23: notably Chinese Valentine’s Day. The Chinese city thereby becomes (SCT)’s 4th destination after Sydney, Gold Coast and Bangkok. The new route is scheduled to operate 4x-weekly with (SCT)’s 402Y-seat 777-200 airplanes. Notably, fellow SE Asian long-haul (LCC) AirAsia X (ASX), whose footsteps (SCT) to some extent follows, recently moved its Tianjin service to Beijing. Indirect competition between Singapore and Beijing comes from Singapore Airlines (SIA)’s 28, Air China (BEJ)’s 12 and Jetstar (IMU)’s 4x-weekly.
(SCT) continued expanding its network out of Singapore (SIN) on 18 September. (SCT) now serves Taipei Taoyuan airport (TPE) three times weekly with its 777-200s. The flights increase to daily at the start of the winter scheduling season, when they also will begin to continue onwards to Tokyo Narita. The Singapore - Taipei route is already highly competitive with 6 other airlines already operating. Singapore Airlines (SIA), China Airlines (CHI) and Jetstar Asia (JSA) operate twice-daily, while Tiger Airways (TGR), TransAsia (FSH) and (EVA) Air each fly the route once a day.
Scoot (SCT) will launch 3x-weekly, Singapore - Shenyang - Qingdao 777-200 service on November 27.
October 2012: Scoot (SCT) has entered into a cooperation agreement with Tiger Airways (TGR) to jointly sell connecting itineraries between the two Singapore base low-cost carriers (LCC)s initially concentrating on connections between Coolangatta/Gold Coast (OOL) and Sydney Kingsford Smith (SYD) served by (SCT) and Ho Chi Minh City Tan Son Nhat International (SGN), Kuala Lumpur International (KUL) and Phuket International (HKT) served by (TGR). While (SCT) is fully owned by Singapore Airlines (SIA), the Singaporean national carrier owns approximately 33% of shares in Tiger (TGR).
Scoot (SCT) further expanded its intra-Asian network on October 29 when (SCT) added Japan to its route map. (SCT)’s flights between Singapore and Taipei Taoyuan (TPE) now continue to Tokyo Narita (NRT). The daily flights are operated with (SCT)’s single fleet of 777-200ER airplanes. The Taipei - Tokyo sector is operated in direct competition with six other airlines: China Airlines (CHI) operates 3x-daily, while (JAL) and (EVA) Air each contribute with 2x-daily operations, and (ANA), Delta (DAL) plus Cathay Pacific (CAT) all with daily flights.
Scoot (SCT) (Singapore Airlines’ (SIA)'s new medium- to long-haul low-cost carrier (LCC)) has agreed to acquire 20 787 airplanes. Deliveries are scheduled to start in 2014. The 787S were originally ordered by (SIA). Engine selection will be made at a later date.
The 787s will be used to replace (SCT)’s 777-200 fleet and facilitate (SCT)’s ongoing expansion. (SCT) began operations in June.
(SCT) (CEO) Campbell Wilson said (SCT) “has quickly grown to a fleet of 4 airplanes and a network soon to encompass 9 cities.”
(SCT)’s network now comprises six cities—Singapore, Sydney, Gold Coast, Bangkok, Taipei, and Tianjin. (SCT) will launch service to Tokyo on October 29, and Shenyang and Qingdao in November.
November 2012: Tiger Airways (TGR) and Scoot (SCT) added 13 more (TGR) destinations to their joint agreement, comprising the Indian cities of Bangalore, Kochi, Hyderabad, Chennai, Thiruvananthapuram, and Tiruchirappalli, plus Phnom Penh, Hanoi, Dhaka, Penang, Colombo, Kuching, and Jakarta. The cities bring the total number of destinations served under the partnership to 16.
(SCT) has had to delay its flights to Shenyang and Qingdao to January, due to regulatory problems.
January 2013: Scoot (SCT), Singapore Airlines (SIA)’s long-haul, low-cost carrier (LCC) subsidiary, which performed its first flight seven months ago, continues its expansion in China’s market. Commencing 11 January, (SCT) now flies from its Singapore (SIN) hub to Shenyang (SHE), located in the Northeast China, 220 km north from the country’s border with North Korea. Operating with 777-200s, (SCT) offers thrice-weekly frequencies with a stopover in Qingdao (TAO). Competition on the route comes from China Southern Airlines (GUN), which operates daily flights via Guangzhou.
Parent, Singapore Airlines (SIA), under (CEO), Goh Choon Phong, has been transformed from a carrier focused on the premium segment to an airline group with a range of brands for different market segments. No longer content to be reliant on the slow-growing premium business, the group aims to tap into all market segments with its portfolio: (SIA) mainline (premium), SilkAir (SLK) (premium short-haul), Tiger Airways (TGR) (low-cost short-haul) and Scoot (SCT) (low-cost medium-haul). Tiger (TGR) and Scoot (SCT) plan to add airplanes this year, as does SilkAir (SLK). In terms of route expansion, China will be a key focus for the group in 2013. It may also look to strengthen relations with Star (SAL) Alliance partner, Air China (BEJ) as another means of accessing China.
Tiger Airways (TGR) on February 1 will implement "Tigerconnect' in collaboration with Singapore’s Changi Airport Group (CAG). This system allows passengers to transfer through Changi Airport without the need for a travel visa to enter Singapore, immigration clearance, or to retrieve and recheck-in bags for onward flights.
Tigerconnect is hosted on the Changi Connects platform that was launched by (CAG) in November. It will be available to passengers connecting through Singapore on (TGR), partner airlines: Mandala (MND) and SEAir (SRQ), and on joint itineraries offered with Scoot (SCT).
Changi Airport has seen a strong increase in transfer traffic over the past year, with a +21% year-over-year increase in the 12 months ending November 2012. Tiger (TGR) has also seen growing demand for connecting flights across its network, with more than >120,000 passengers transiting Changi Airport in 2012.
March 2013: Scoot (SCT) is further exploiting the absence of a local low cost carrier (LCC) in Taiwan by selecting Singapore - Taipei - Seoul Incheon as its seventh route. (SCT) is already the largest (LCC) serving Taiwan, which has the lowest (LCC) penetration rate among major Asian markets. Following the mid-2013 launch of Jetstar Hong Kong (JHK), Taiwan will also be the last remaining medium or large-size market in Asia without a local (LCC).
(SCT) launched service in September 2012 on the Singapore - Taipei - Tokyo Narita route, which (SCT) now serves daily. (SCT) has been focusing primarily on stimulating demand in the local Singapore - Taipei and Taipei - Tokyo markets rather than on Singapore - Tokyo through passengers.
(SCT) will similarly focus on the under-served Taipei - Seoul market after launching the Singapore - Taipei - Seoul route on 27-May-2013 with an initial three weekly frequencies. The new route will also boost (SCT)’s presence in the competitive Singapore - Taipei market as the additional three weekly flights make (SCT) the largest carrier on the route, just ahead of (SIA).
(SCT) added a tenth flight to Singapore - Seoul.
April 2013: Scoot (SCT) has completed the last phase of its initial network development, announcing on 8 April 2013 the selection of Nanjing as its 11th destination and fourth in mainland China. (SCT) will be the only foreign low cost carrier (LCC) at Nanjing, which like most secondary cities in China is under served from an international perspective.
Singapore - Nanjing will be launched on 3 June 2013 and give (SCT) a total of eight routes by its first year anniversary on 4 June 2013. After celebrating its first year anniversary, (SCT) is expected to take a hiatus from fleet and network and expansion for at least 18 months. The hiatus will allow (SCT) to focus on improving profitability as its initial network and business model beds down.
The hiatus also gives (SCT) ample time to prepare for the delivery of the first of at least 20 787s in late 2014. The 787 will usher in a new era of growth and improved profitability for (SCT). But while (SCT) waits for its mix of 787-9s and 787-8s, competitors could pursue faster expansion, leaving (SCT) with a smaller slice of Asia’s emerging low-cost medium/long-haul market.
June 2013: Scoot (SCT) begins 3X-weekly, Singapore - Nanjing service.
Singapore Airlines Ltd (SIA) selected Rolls-Royce Holdings Plc (RRC) engines to power the 30 787-10X jets it ordered as the first buyer of the new 787 Dreamliner model and for planes at discount subsidiary Scoot (SCT).
(SIA) chose the (Trent 1000) engines over a General Electric Corporation engine available for the airplane. The order is conditional upon Boeing (TBC) formally launching the 787-10X.
Singapore Air (SIA) agreed to order 30 787-10Xs and 30 more A350-900s, also powered by (RRC), as the region’s economic growth spurs travel demand. (CEO), Goh Choon Phong is adding more planes and has upgraded business-class (C) cabins as he faces increasing competition from Emirates (EAD) and other airlines expanding in Southeast Asia.
Rolls-Royce (RRC) will provide (Trent 1000)s also to power the 20 787s (SIA)’s Scoot (SCT) unit will operate from next year.
(SIA) signed a letter of intent (LOI) with (RRC) for a service package for both deals. Under the agreement, (RRC) will be responsible for the provision of maintenance, repair and overhaul (MRO) services for the engines, as well as for spare engine support.
(SIA) shares fell 1.05% to S$10.35 in the city before the announcement. The stock has dropped -3.7% this year.
The agreement with Boeing (TBC) comprises 30 firm-ordered 787-10Xs for delivery from the 2018 - 2019 financial year. The deal with Airbus (EDS) comprises 30 firm-ordered A350-900s, on top of 40 placed previously, for delivery from the 2016 - 2017 financial year, plus options for 20 more. The options may be converted into firm orders for larger A350-1000s on which (RRC) is the exclusive engine provider.
Rolls (RRC) also provides the engines for Singapore Air’s A380 superjumbos and last year opened a turbine assembly facility in the city-state.
July 2013: Scoot (SCT) began 3X-weekly, Singapore - Taipei - Seoul, and daily, Singapore - Taipei service.
(SCT) recently received a fifth 777-200, which will enable
flights to Seoul and Nanjing.
October 2013: The Singapore - China market has huge potential for low-cost carriers (LCC)s, which currently only account for 19% of capacity between the two countries. But the market has proven to be challenging for Jetstar Asia (JSA), which is cutting two more Singapore - China routes and reducing the (LCC) group’s capacity share to an insignificant 3% compared to 10% two years ago.
Expansion from Tigerair (TGR) and Scoot (SCT) has filled some of the void left by (JSA). But total (LCC) capacity and the (LCC) penetration rate in the Singapore - China market is on the decline, dropping to only 16% in January 2014.
Singapore’s overall (LCC) penetration is now 31% and is continuing to rise. The relatively low penetration in the Singapore - China market is surprising, particularly as the market enjoys "open skies." But the long-term potential is there for more (LCC) services.
Scoot will launch flights between Singapore and Hong Kong in November. (SCT) is set to launch on the popular route, going head to head with its parent, Singapore Airlines (SIA) and sister company Tigerair (TGR). Services will initially operate five-times weekly, being increased to daily in December.
(SCT) is one of the youngest low cost carriers (LCC)s in the highly competitive Asian airline market and currently flies to 11 destinations in the region from Singapore. The new service between the two Asian powerhouse cities will launch on November 15, with tickets on sale from the end of September.
Campbell Wilson, (CEO) of (SCT) said: “Scoot is thrilled to fly between Singapore and Hong Kong, linking these two exciting and vibrant cities. Soak up the "Scootitude" flying experience the moment you step onto our airplanes and find out why flying (SCT) is such a unique travel adventure. It’s time to start "Scootin’" outta here to Hong Kong”
Asked about competing with its parent company on the route, (SCT)'s (CEO), Campbell Wilson was quoted in the Chinese press as saying: "We have had the same situation on the Singapore - Bangkok and Singapore - Sydney routes, where we are doing quite well."
Scoot (SCT) has unveiled plans to launch service to Perth, which will become the Singapore Airlines (SIA) long-haul low-cost carrier (LCC) subsidiary’s 12th and final destination to be served as part of its initial six-airplane 777-200 operation. (SCT) has quickly expanded since launching in June 2012 but after placing into service its sixth 777 in November 2013, it will take a one-year hiatus from expanding until its first of 20 787s arrive in late 2014.
In an unusual but logical move, (SCT) has decided to lease its sixth 777 from (SIA) and keep the airplane in its (SIA) configuration. This enables (SCT) to save on retrofit costs but will lead to higher per seat costs until the airplane is replaced with a 787-8 in 2015.
Scoot (SCT) has emerged as an important tool to expand (SIA)’s already leading presence in the key markets of Australia and Greater China. Perth will be (SCT)’s third Australian destination while its other previously announced new upcoming destination, Hong Kong, will be (SCT)’s sixth destination in Greater China. (SCT) also serves Bangkok, Seoul, and Tokyo.
(SCT) currently operates five 777-200s, which are set to be replaced by 2015 with 11 new 787 airplanes.
November 2013: Scoot (SCT) has added Hong Kong (HKG) to the list of destinations it serves from its Singapore (SIN) hub on November 15th. The 2,570 km route will be served five times weekly with (SCT)’s 777-200s, until December 12th, when operations become daily. Hong Kong becomes (SCT)’s 12th destination since it launched in June 2012. (CEO), Campbell Wilson, said: “It’s fantastic to be adding Hong Kong to (SCT)’s fast-growing network, now covering 12 cities in seven countries. Hong Kong truly has something for everyone (besides being one of the world’s iconic cityscapes, it boasts fantastic mountains, beaches, parks, islands, shopping and, of course, food. And with (SCT)’s bright and early arrival, our guests will be able to make the most of their visit) in addition to enjoying (SCT)’s great value, fuss-free and reliable travel experience, with Scootitude, enroute.” Competition on the route is intense as Cathay Pacific Airways (CAT), Jetstar Asia (JSA), Singapore Airlines (SIA) and TigerAir Singapore (TGR) all offer multiple daily flights between the two airports.
December 2013: Thai carrier Nok Air (NKA) and Singapore’s Scoot (SCT) have inked a memorandum of understanding (MOU) to create a new mid- to long-haul low-cost carrier, called "NokScoot," based in Bangkok. “The new airline will be named "NokScoot" and will be based at Don Mueang International Airport. It will operate wide body airplanes on medium- and long-haul international routes. The establishment of the new airline is subject to regulatory approvals. Details about its fleet, products and route network will be announced at a later date,” the carriers said.
Nok Air (NKA) was considering a new mid- to long-haul venture in September. At the time, (NKA) (CEO), Patee Sarasin said he was looking to deploy A330s or 787s on six- to eight-hour flights from Bangkok. He flagged London as a likely destination.
Nok Air (NKA) will take a 51% stake in the joint venture (jv), while Scoot (SCT) will hold the remaining 49%. The initial investment will be THB2 billion/$62 million.
(NKA) operates both narrow bodies and turboprops on Thai domestic and international routes, whereas Scoot (SCT) serves mid- to long-haul low-cost flights from Singapore using its fleet of 777-200s.
Scoot (SCT) has become the fifth airline to offer non-stop service between Singapore (SIN) and Perth (PER), the Western Australian city where the England cricket team recently surrendered The Ashes back to Australia. The 3,895 km route is already served by Singapore Airlines (SIA) (four daily flights), Tigerair Singapore (TGR) (two daily flights), Jetstar Asia (JSA) (13 weekly flights) and Qantas (QAN) (daily flights). On December 12th, Scoot (SCT) joined the battle with its five times weekly service using 777-200s. Perth becomes Scoot (SCT)’s third Australian destination after Gold Coast and Sydney.
February 2014: Scoot (SCT) will use its first Boeing 787 airplanet (a 787-9 due for delivery in November this year) on routes that include Japan, Taiwan, and Australia, (SCT) (CEO), Campbell Wilson said. Speaking at the Singapore Airshow, Wilson said the expanding northeast Asia market will suit the new airplane’s capability, and better help feed into (SCT)’s increasingly close ties to its Singapore-based narrow body low cost carrier (LCC) cousin TigerAir (TGR).
May 2014: Australia’s international market is up almost +7% in the last 12 months. The fastest-growing airports for international traffic are Adelaide (+25%) and Perth (+9%), though Sydney remains the busiest international airport by far. Perth’s growth was helped by the launch in mid-December of five times weekly flights from Singapore Airlines (SIA)’s long-haul, low-cost carrier (LCC) subsidiary, Scoot (SCT).
Australia’s domestic air travel market grew by a modest +1.8% in 2013 to reach 57.5 million passengers. The country’s international air travel sector showed rather healthier growth, up +5.9% to 31.4 million. In January 2014, international traffic was up an impressive +10.5%, the first double-digit increase since March 2012. How much of this was down to English cricket fans returning home in disgust at their team’s 5-0 thrashing by the home team in the test series is not clear.
Among the country’s top 10 domestic routes nine reported growth in the year-ending February 2014 (the latest available data), with Melbourne - Hobart (+8.5%) leading the way, and only Melbourne - Gold Coast (-4.5%) reporting a decline. With almost 8.3 million annual passengers, the Sydney - Melbourne route remains by far the country’s busiest air route (and one of the busiest in the world), and grew by +1.7% in the last 12 months.
Boeing (TBC) Flight Services and low-cost carrier (LCC) Scoot (SCT) have signed a five-year pilot (FC) training agreement to support the Singapore-based (SCT)’s fleet transition to 787s. Boeing (TBC) anticipates 32 Scoot (SCT) pilots (FC) will undergo training in 2014.
Scoot (SCT) will acquire 20 787s beginning in late 2014. The airplanes were originally ordered by parent company, Singapore Airlines (SIA). (SCT) currently operates 777s on medium- and long-haul flights from Singapore to Sydney, Gold Coast, Bangkok, Taipei, Tokyo, Tianjin, Shenyang, Nanjing, Qingdao, Seoul, Perth, and Hong Kong.
Boeing Flight Services VP, Sherry Carbary said, “Aviation opportunities (for airlines and pilots (FC)) are expanding rapidly in the Asia-Pacific region, and we’re pleased to offer a robust network of experienced instructors and training devices close to our customers across the region.”
Boeing’s 2013 Pilot & Technician Outlook projects a requirement for 498,000 new commercial airline pilots (FC) and 556,000 new maintenance technicians (MT) to fly and maintain the new airplanes entering the world fleet over the next 20 years. In Southeast Asia, 51,500 pilots (FC) and 64,700 technicians (MT) are needed to fill the gap.
August 2014: Net profits for Singapore Airlines parent, the (SIA) Group fell -71.4% year-over-year during its fiscal-first-quarter ended June 30. (SIA) reported a first-quarter net profit of +SGD35 million/+$28 million, down -SGD87 million from the year-ago-quarter.
The (SIA) Group’s first-quarter revenue fell -4.1% year-over-year to SGD3.7 billion. Operating expenses fell -3.1% year-over-year to SGD3.6 billion, resulting in an operating profit for the quarter of +SGD39.5 million, down -51.7% year-over-year.
Singapore Airlines (SIA) reported a fiscal-first-quarter operating profit of +SGD45 million, down -49.4% year-over-year from +SGD89 million in operating profit the airline reported in the 2014 June quarter; (SIA) Engineering made +SGD21 million in operating profit, down -25% year-over-year from last year’s +SGD28 million; regional airline SilkAir (SLK) posted +SGD2 million in operating profit, down -85.7% year-over-year from the year-ago-quarter’s +SGD14 million; and (SIA) Cargo (SQC) reported a -SGD18 million loss, narrowed from a -SGD40 million loss the air freight carrier posted a year-ago.
Revenue decline was due to “weaker yields amid intense competition, and unforeseen events that depressed travel demand in some key Asian markets,” (SIA) said. “(SIA) Cargo (SQC) recorded lower revenue as the air freight market continued to be affected by excess capacity.”
“In addition to the weaker operating performance, results from associated and joint venture (JV) companies [down -32% (YOY)] also contributed to the decline in net profit,” (SIA) said. “Share of losses [by] associated companies increased by SGD16 million from last year, of which SGD14 million was attributed to Tiger Air (TGR) Holdings. The share of profits [by] joint venture (JV) companies [was] reduced by SGD11 million, mainly [attributable to] weaker performance from the engine repair and overhaul centers.”
For the first fiscal quarter, parent airline company, Singapore Airlines (SIA) reported +1.8% year-over-year passenger growth, carrying 4,652,000 passengers. (RPK)s were up +0.4% to just shy of 24 billion, while (APK)s grew +0.8% to 30.3 billion. Passenger load factor fell -0.3 point to 77.7% LF during the quarter. Passenger yield fell -1.8% to 10.9 cents.
SilkAir (SLK)’s first-quarter passenger count was 870,000, up +0.7% year-over-year. (RPK)s were up +2.6% year-over-year to 1.4 billion; capacity grew +2.8% year-over-year to 2 billion (ASK)s. SilkAir (SLK)’s resulting passenger load factor for the quarter came to 69.5% LF, a -0.1 point drop from last year’s first-fiscal-quarter. Passenger yield fell -5.7% to 13.3 cents.
(SIA) Cargo (SQC)’s freight traffic was 1.56 billion (CTK)s during the quarter, a -3.5% drop from the year-ago-quarter’s 1.62 billion (CTK)s. (SQC)’s capacity kept pace, also falling -3.5% year-over year to 2.5 billion tonne-kilometers. Cargo load factor came to 62.4% LF, -0.1 point year-over-year drop.
“The outlook for the air transportation industry has become more challenging with [the] continuing uncertain global economic climate, geo-political concerns in the region and elevated fuel prices,” (SIA) said. “In this difficult operating environment, the Group will continue to monitor demand trends closely and make appropriate adjustments to capacity deployment, alongside a continued focus on cost discipline.”
As of June 30, Singapore Airlines (SIA) fleet consisted of 103 airplanes (57 Boeing 777s, 27 Airbus A330-300s and 19 A380-800s). SilkAir (SLK)’s fleet comprised 26 airplanes (16 A320-200s, six A319-100s and four 737-800s). (SIA) Cargo (SQC) has a fleet of eight 747-400F freighters. The (SIA) Group’s low-cost-carrier (LCC) subsidiary, Scoot (SCT) maintains a fleet of six 777-200s.
The Competition Commission of Singapore (CCS) has granted anti-trust immunity (ATI) to the alliance agreed between Singapore-based budget carriers Scoot and Tigerair Singapore last December.
The (ATI) allows the two carriers to coordinate schedules and pricing on routes operated by both airlines. The two carriers operate complementary networks, with Tigerair (TGR) focusing on shorter-haul routes and Scoot (SCT) operating in the medium-long haul arena. The airlines said the alliance would make it possible for them to offer “a better spread of flight choices,” offering passengers “greater flexibility.”
The two airlines will also collaborate on connecting traffic via Singapore Changi Airport, “supporting the Singapore aviation hub and broader economy,” they said.
This will afford customers from (SCT)’s network in China streamlined connection onto Tigerair (TGR)’s network in Southeast Asia and India. At the same time, (TGR) customers will have more streamlined access to (SCT)’s choice of medium-haul destinations.
Tigerair Group (CEO), Lee Lik Hsin said, “Besides allowing us to further strengthen our alliance with (SCT), this development will also empower both (SCT) and ourselves to deliver even greater flexibility and value to our customers through the coordination of schedules and routes. This is not just a positive development for Tigerair (TGR) and Scoot (SCT_— it is also a win-win partnership between the alliance and our customers.”
The (ATI) also allows for closer cooperation in other areas such as sales, pricing, scheduling and systems integration. It will also allow (SCT) and (TGR) to build on their existing interline cooperation arrangement.
(SCT) has selected Rockwell Collins’ Dispatch? 100 avionics service and asset management program for its new fleet of 20 Boeing 787 Dreamliners.
Under the agreement, Rockwell Collins will provide Scoot (SCT) with guaranteed spares availability, technical repairs and performance monitoring on Rockwell Collins’ comprehensive suite of communications, surveillance, displays and pilot (FC) controls systems. The total life cycle solution is coordinated by a dedicated program manager.
“Our working knowledge of Rockwell Collins’ state-of-the-art avionics for the 787 Dreamliner, combined with our total life cycle Dispatch support solution tailored to Scoot’s specifications, will provide on-site and preventive maintenance,” said Colin Mahoney, Senior VP, International & Service Solutions for Rockwell Collins. “It also allows service engineers and maintenance personnel to identify issues proactively and have solutions ready so, when the 787 lands, it can dispatch as soon as possible.”
Rockwell Collins’ global network of more than >80 locations provides repair and overhaul of avionics equipment for more than >6,000 commercial, business, corporate and military operations. Additional logistics capabilities include on-board services, service parts, training and simulator systems and service, technical information services and technical services.
While Scoot (SCT) will use Boeing 787 deliveries to grow its fleet next year, the initial deliveries will be focused more on fleet replacement than expansion, (CEO), Campbell Wilson said.
September 2014: Scoot (SCT) has moved its Bangkok flights to Bangkok Don Mueang (DMK). The 1,437 km daily service from Singapore (SIN) shifted airports on September 1st and will be flown with (SCT)’s 777s. Competition comes from Thai AirAsia (THA), who also operates the same airport pair with six daily flights. In addition, there are almost 130 weekly departures from Singapore to Bangkok Suvarnabhumi operated by the likes of Cathay Pacific Airways (CAT), Jetstar Asia (JSA), Singapore Airlines (SIA), Thai Airways (TII), and Tiger Airways (TGR). Scoot (SCT)’s last truly new route was when it started serving Perth last December.
An interline agreement between Scoot (SCT) and Nok Air (NKA) will enable passengers to travel on a single ticket from Singapore to Mae Sot, or from Sydney to Chiang Rai.
Scoot (SCT) has revealed that Hong Kong, Sydney, and Perth will be the first three routes to be upgraded to Boeing 787-9s when the new airplanes begin arriving.
The three routes will be operated with 787s from March 29, according to the summer schedule that has been uploaded to reservations systems. However, the new airplane may also be used in the Scoot (SCT) network before the summer schedule season begins, as it expects to receive its first 787 in November.
Scoot (SCT) will initially be using the 787s to replace its six Boeing 777-212ERs. Flights from Singapore to Bangkok and the Gold Coast, Australia are due to switch to 787s in late April, followed by flights to Chinese destinations Tianjin and Shenyang (via Qingdao) from late May, according to the summer schedule. This would only leave a few of Scoot (SCT)’s flights still operated by 777s, including its route to Nanjing, China, and flights to Seoul and Tokyo, both via Taipei.
These 787 deployments align with (SCT)’s plan to retire all of its 777s by the middle of 2015. “It will be quite a rapid transition to the 787,” an airline spokeswoman said. The 787 deliveries are on track to be delivered on time, beginning in November, and will generally replace the 777s on a one-for-one basis.
Scoot (SCT) has 10 787-9s and 10 787-8s on order, with the 787-9s to begin arriving first. (SCT) expects to have 11 787s by March 31, 2016, giving it a net gain of five airplanes after the 777 retirements. However, (SCT) is not revealing how the first 11 deliveries will be split between the two models.
October 2014: Singapore Airlines (SIA), key stakeholder in the Tigerair (TGR) low-cost carrier (LCC) Group, has taken a controlling interest in the (LCC)’s holding company and sold the Tigerair Australia (TAU) offshoot to Virgin Australia (VAU) for AUD1 ($0.88).
In what is effectively a bailout of the Tigerair Group, (SIA) has upped its stake in Tiger Airways Holdings from a previous 40% to 55%. It announced a further “guaranteed buy” rights issue to raise some $190 million, which could boost its total ownership to around 70%.
These changes mark the latest elements of a major reorganization following Tigerair (TGR)’s group loss of -$177 million in the year ended March 31, 2014. Immediately after the losses were announced, new (CEO), Lee Lik Hsin was brought in from SIA’s executive team. “Many of the issues [leading to Tigerair’s losses] came from JVs [joint ventures] which simply didn’t work,” Lee told ATW. “That is about to change.”
Since Lee took the helm, the group has sold its Tigerair Philippines (SQH) operation for $15 million to Cebu Pacific (CEB), closed down its Indonesian Tigerair Mandala (MND) subsidiary following a lack of potential buyers, and subleased surplus airplanes to other carriers.
Nonetheless, the latest figures show Tigerair (TGR) is still loss-making. (TGR)’s latest report shows a loss of -S$182.4 million /-$143 million for the three months to September 30, largely due to a S$99.3 million write-down on the sublease of ex-Filipino Tigerair Airbus A320s to Indian carrier IndiGo (IGO).
The sale of the remaining 40% of Tigerair Australia (TAU) to Virgin (VOZ) will take another (JV) headache off the Tiger (TGR) management’s plate. Tiger Australia (TAU) has failed to make a profit for the last two years and saw a ban on flights three years ago after operational irregularities. “Given the ongoing subdued consumer demand in the Australian domestic market, the growth of the Tigerair Australia (TAU) domestic fleet is likely to be reduced,” Virgin Australia (VOZ) (CEO), John Borghetti said.
Lee said the new structure at Tigerair (TGR) should now allow it to concentrate on being what he called “a broad no-frills airline that would tap into strategic alliances into overseas markets.”
This points to an impending tie-up with Tigerair (TGR)’s (SIA) sibling (the wholly (SIA)-owned Scoot (SCT) long-haul (LCC). Given the Competition Commission of Singapore’s recent green light for such an alliance and immunity from anti-trust suits for an alliance, the stage would seem to be set for a full (LCC) arm to be run out of Singapore Airlines (SIA).
With (SIA)’s new controlling interest in both, a joint long/short-haul (LCC) entity could deliver a much more targeted and operationally efficient product to compete with AirAsia in the region.
Lee hinted as much in a recent interview and stressed that Tigerair (TGR) was looking at “going beyond a strategic alliance” with Scoot (SCT).
November 2014: Scoot (SCT) has unveiled its first Boeing 787 Dreamliner, which (SCT) named "Dream Start." (SCT) is due to take delivery of its first Boeing 787-9 Dreamliner in December, with the first commercial flight of the airplane scheduled in January 2015.
(SCT)'s 787-9 Dreamliner will feature a two-class configuration with 375 seats, including 35PY premium seats in "ScootBiz" class and 340Y economy seats.
(SCT) has 20 787s on order, including 10 787-8s and 10 787-9s. The long-haul budget airline said it aims to retire all six of its 777-200s and expects to operate an all 787 fleet by middle of 2015.
Check out how the "Dream Start" was built via this 3-min time-lapse video: http://www.wcarn.com/news/38/38899.html
December 2014: News Item A-1: Singapore-based low-cost carrier (LCC) Scoot (SCT) has revealed one of the new routes it will introduce with its Boeing 787 deliveries, adding Melbourne as its fourth Australian destination.
Scoot (SCT) is due to receive its first 787 later in December, and it expects to have 11 of the 787s by the end of March 2016. Six of these will be replacements for Scoot (SCT) current fleet of Boeing 777-200ERs, leaving five for capacity growth.
All of the 777s are due to be replaced by mid-2015, so Scoot (SCT)’s current Australian destinations (Sydney, Perth and Gold Coast) will have 787 service by the time the new Singapore - Melbourne service begins November 1.
Scoot (SCT) has a total of 20 787s on order. The total is split between the 787-8 and 787-9 model, with the early deliveries to be 787-9s. These orders were transferred from the (LCC)’s parent, Singapore Airlines (SIA).
The Melbourne route will start with five flights a week. Australia-based (LCC) Jetstar (IMU) already serves Melbourne - Singapore, as do full-service carriers such as Singapore Airlines (SIA), Emirates (EAD), and Qantas (QAN).
News Item A-2: Scoot (SCT) will delay its first Boeing 787-9 services a second time from the original planned inauguration last month. (SCT) had planned to launch 787 Dreamliner services in November this year, flying from Singapore to Perth, Australia, and Hong Kong. However, this was delayed to January 2015. (SCT) has now announced a further delay until February next year.
There is no indication the latest delay will affect the delivery of the rest of (SCT)’s new airplanes on order, with the first tranche of ten set to complete delivery from Boeing by the end of 2015.
(SCT) has committed to fly the world’s first all-787 fleet by mid-2015, with a phasing out of the (LCC)’s existing Boeing 777-200ER airplanes as new 787 deliveries arrive.
It also plans to use the fuel-efficient airplanes to expand its network to at least seven new destinations, including a 5x-weekly service to Melbourne, Australia late next year.
(SCT) has an order book for 20 787s, 10 of the 787-9 variant, and 10 in the 787-8 option, which were ordered by (SCT)'s parent company, Singapore Airlines (SIA) in 2011.
January 2015: News Item A-1: Singapore-based low-cost carrier (LCC) Scoot (SCT) is significantly boosting its network in its key Australian market, thanks to a new interline deal with Virgin Australia (VAU).
Scoot (SCT), a subsidiary of Singapore Airlines (SIA), will be able to sell tickets to eight additional destinations in Australia via the interline agreement with (VAU). Scoot (SCT) will connect to these routes through its existing Australian gateways in Sydney, Perth, and the Gold Coast.
The interline deal gives (SCT) the opportunity to expand its reach in Australia without committing more capacity. The recent and planned growth of international service into Australia by Asian carriers (particularly long-haul low cost carriers (LCC)s) has made adding new flights a tougher proposition.
The Virgin Australia (vau) destinations covered by the agreement are Adelaide, Ayers Rock/Uluru, Brisbane, Canberra, Cairns, Hobart, and Launceston. Melbourne will also be included, until (SCT) launches its own direct flights to that city in November.
(SCT) has previously discussed forming a link with Tigerair Australia (TAU), which is a subsidiary of Virgin Australia (VAU). However, Scoot (SCT) presumably decided (VAU) offers a broader domestic network. The interline deal does not include any Tigerair Australia (TAU) services.
Scoot (SCT) already interlines with parent, Singapore Airlines (SIA) and the group’s other subsidiaries, SilkAir (SLK) and the Singapore-based, Tigerair (TGR)) which is separate from Tigerair Australia (TAU). It also interlines with Thailand’s Nok Air (NKA).
The new interline deal is not reciprocal, so Virgin Australia (VAU) will not be selling interline tickets on any (SCT) flights. (VAU) already code shares with Singapore Airlines (SIA) on many international routes. The main benefit to the Australian carrier from the (SCT) interline, will be feeding more traffic into its domestic network.
Virgin Australia (VAU) has made it clear that it will not code share or interline with its own (LCC) subsidiary, Tigerair Australia (TAU), as it does not want to dilute its full-service product.
News Item A-2: Singapore-based low-cost carriers (LCCs) Scoot (SCT) and Tigerair (TGR) say they are beginning to realize significant benefits from a partnership authorized by competition regulators last year.
The two carriers have seen the number of passengers connecting between them double since August 2014, when Singapore’s Competition Commission granted them anti-trust immunity to cooperate more closely.
Tigerair (TGR) is a short-haul (LCC), while Scoot (SCT) operates medium- and long-haul routes. Executives from Singapore Airlines (SIA) (the parent of both (LCC)s) have often stated that closer connectivity will be key to improving their financial performance. Additional feed will help (SCT) fill its wide body airplanes and enable (TGR) to offer a greater range of destinations.
The airlines are also aligning operations where their networks overlap. From this month, the (LCC)s are operating as a joint venture (JV) on the Singapore - Hong Kong and Singapore - Bangkok routes. From February, (SCT) will increase frequency on its Singapore - Perth route to daily, allowing (TGR) to redeploy its airplanes from this route to elsewhere in its network.
Later this year, the two carriers plan to introduce “seamless booking of each other’s flights on their respective websites.” They are also working to integrate their reservations systems, and improve schedule coordination. Other cooperation opportunities include common ground handling, procurement and service center operations.
News Item A-3: Boeing (TBC) delivered a new 787-9 Dreamliner (37112, 9V-OJA - - SEE PHOTO - - "SCT-787-9 - 1ST 2015-01") to Scoot (SCT).
March 2015: News Item A-1: Low-cost carrier (LCC) Scoot (SCT) will expand its services from Singapore to Bangkok’s Don Mueang (LCC) hub, to fly 10 Boeing 777-200 flights a week to the Thai capital. (SCT) will also replace its existing 777 schedules from Changi Airport with new 787s as they arrive from Boeing (TBC) starting in May.
Although Scoot (SCT) bills itself as a long-haul (LCC), the new schedules will help give it and its sister Singapore Airlines (SIA) subsidiary, Tigerair (TGR) increased regional capacity.
(TGR) currently only flies into Bangkok’s main airport, Suvarnabhumi International.
(SCT) (CEO), Campbell Wilson has already hinted at closer ties between the two (SIA) offshoots, with the use of 787 airplanes and linked routes to help “concrete steps toward realizing the full potential of our complementary networks,” he said recently.
The new flight schedules will take off in the daytime morning hours, rather than current “graveyard” schedules back to Singapore.
“The upcoming rollout of joint-venture (JV) routes, deeper system integration and schedule co-ordination will provide greater convenience and flight options,” said Lee Lik Hsin, Group (CEO) of Tigerair (TGR).
May 2015: Scoot (SCT) is to replace its last Australian (Boeing 777) schedule with new Boeing 787 airplanes. From May 1, (SCT) began flying 787s to the Gold Coast, and will start 787 services to Melbourne in November. Scoot (SCT)’s Hong Kong and Bangkok routes also use 787s, and the remainder of its Asian destinations will be changed to the 787s by the end of 2015.
787-9 (37115, 9V-OJD "Big Yella Fella") delivery.
June 2015: Scoot (SCT) is to launch a service to Osaka on July 8, with six services weekly, three via Bangkok, and three via Kaohsiung with Boeing 787 airplanes.
July 2015: "Singapore’s Changi Airport Signs Up 5 New Airlines for T4" by (ATW) Jeremy Torr, July 13, 2015.
Singapore’s Changi Airport will have five new tenants for its new S$1 billion/$750 million Terminal 4, due to open in the second half of 2017.
The new tenants include three AirAsia subsidiaries (AirAsia Berhad (Malaysia) (ASW), Indonesia AirAsia (AWR) and Thai AirAsia (THA)) as well as flag carriers Korean Air (KAL) and Vietnam Airlines (VIE). They will join lead tenant Cathay Pacific Airways (CAT) as Terminal 4 launch airline customers.
The new terminal is billed as a replacement for the airport’s previous Budget Terminal, but also as an extension of the airport’s full-service provision. It will boost Changi’s overall passenger capacity from 66 million passengers a year to around 75 million in its initial phases, and will eventually have a maximum planned capacity of 16 million passengers.
Changi Airport Group (CAG) said a mix of tenants will occupy the new terminal’s four wide body and 17 narrow body gates; more announcements are on the way.
The terminal will feature new, high-tech processing technology for travelers. This will include a complete self-service check-in facility including automated registration and bag drop, facial recognition immigration clearance, and scanned-in self-service boarding processes.
(CAG) management says the new technologies will eliminate the need for manual verification and lead to shorter queuing times and increased flexibility through usage of the self-service kiosks.
“Passengers can expect to pass through the various touch points more smoothly and stress-free, giving them more time to enjoy the facilities,” (CAG) Executive VP Air Hub & Development, Yam Kum Weng said.
(CAG) speculates the new technologies will also boost long-term growth, which has slowed at Changi over recent quarters. The new systems are billed to bring both time saving and lower operating costs for tenant airlines, with some -40% less processing costs compared to other terminal operations.
However, the lack of direct SkyTrain access to the other Changi terminals has seen local low-cost carriers Scoot (SCT) and Tigerair (TGR) hold back on support for the new facility. Transit passengers will need to take buses from T4 to other departure points, something Scoot (SCT) (CEO), Campbell Wilson was highly critical of last year.
News Item A-2: Scoot (SCT) on July 6th unveiled its newest 787-9 Dreamliner (9V-OJE), featuring a special commemorative party-themed livery to celebrate Singapore's 50th birthday, according to Facebook user "NinerVictor."
The new 787-9 Dreamliner, named "Maju-lah," has been adorned with a colorful new livery that features the words "Happy 50th Birthday Singapore" and as many as 20 red balloons featuring the company logos of its Singaporean partners. The 787-9 Dreamliner was put into service on July 8, 2015.
Scoot (SCT) also wants to give other Singapore success stories the canvas to celebrate, so Scoot (SCT) has joined hands with twenty local companies, each of whom is represented on one of the party balloons, to send their collective birthday well-wishes to Singapore.
Aside from showcasing Singapore's jubilee, "Maju-lah" will also host Scoot (SCT)'s "National Day In-Flight Party" on July 31, 2015.
Scoot (SCT) took delivery of its first 787-9 (9V-OJA, "Dream Start") on the morning of February 2, 2015 SEE PHOTO - - "SCT-787-9 - 1ST 2015-02."
Scoot (SCT) is on track to become the first budget airline in the world to operate an all-787 Dreamliner fleet when its last 777 is retired from scheduled service in late August 2015.
(SCT) said it has just taken delivery of its 6th 787 Dreamliner, which is also its first 787-8. The smaller version of Boeing's game-changing 787 airplane is named "Ba Bao," Chinese for "eight treasures or eighth baby".
"Ba Bao" operated its first service to Sydney on Thursday morning July 23.
News Item A-3: On July 23, a Boeing 787 Dreamliner of Scoot Airways (SCT) from Singapore landed smoothly at Nanjing Lukou International Airport (NKG), marking the 787's debut in the city. (SCT)'s inaugural 787 service to Nanjing was welcomed with a traditional water cannon salute.
Nanjing is the 4th destination (SCT) has opened in mainland China. The flight TZ082/081 is scheduled 4x-weekly on Mondays, Tuesdays, Thursdays and Saturdays. Since the Singapore - Nanjing scheduled service was opened in June 2013, (SCT) has safely operated at Nanjing Airport for over three years.
As the world's first and only budget airline operating the 787 Dreamliner, Scoot (sct) is constantly endeavoring to improve customers' travel experiences. (SCT)'s Dreamliner is equipped with 375 seats and a more comfortable cabin ambience results from its high flight stability and comfort level.
August 2015: News Item A-1: Scoot (SCT) is looking at potential destinations in Europe and the Middle East as part of future network expansion plans, according to (CEO), Campbell Wilson.
Although (SCT) has previously denied plans to add service to Europe, several factors including fuel prices, may have tipped the scales.
“We are exploring some options at the moment,” he said. “We haven’t yet finalized our decision . . . but it is not too far away.” He added that destinations could include the UK as “. . . our [new 787] airplanes can fly nonstop up to London.”
(SCT) has also tabled plans to double seat capacity in the next 12 months, and is on schedule to complete its 11-strong Boeing 787 fleet by next year’s first quarter and increase staff +30% to 1,000, including new pilots (FC) and cabin crew (CA).
(SCT)’s new strategy, which will expand its route network +50% in mid-2016, will add around seven new destinations in the coming months. It plans to add one new route to China in October and +4 more in 2016.
(SCT) expects its Chinese network to roughly double in size from the current five destinations by the end of next year, and says it will announce new routes in the first quarter of next year.
Wilson said the replacement of its former Singapore Airlines (SIA)’s Boeing 777 fleet has made a significant difference to (SCT)’s balance sheet. “The single biggest benefit of converting to a 787 fleet is that these planes are about +20% more fuel efficient,” he said.
News Item A-2: Scoot (SCT) has started its first Boeing 787-8 schedules on its Singapore - Sydney route. It will replace all its 777-200ERs with the new 787-8s from the end of August.
News Item A-3: Scoot (SCT) will take over the 4x-weekly Hangzhou route, which is currently served by its regional affiliate, SilkAir (SLK), from October 25.
From December 1, (SCT) will use its new Boeing 787-8 airplanes on the route and increase frequency to 5x-weekly.
Hangzhou will be (SCT)’s 5th destination in China. (SCT) serves second tier cities at Tianjin, Shenyang, Qingdao, and Nanjing using 787s.
According to SilkAir (SLK), the move comes as yields across the region are under pressure, and is an effort to “better optimize the utilization of the (SIA) Group’s resources and present a better match of capacity to demand.”
The Association of Asia Pacific Airlines (AAPA) Director General, Andrew Herdman noted recently that airlines across the region have been “carefully reviewing their route networks and matching capacity with the expected growth.”
The move by Singapore Airlines (SIA) to put more fuel-efficient, low-cost service provision aircraft on its medium-haul routes is a reflection of the route optimization trend as noted by Herdman. He said that as long as the regional operating environment remains highly competitive, carriers need to maintain “a disciplined approach to managing costs . . . and ongoing investments in route development.”
(SCT) is already sharing what it calls “deep and wide-ranging cooperation” with (SIA)’s regional (LCC) offshoot, Tigerair (TGR), and has flagged even closer ties between the two budget carriers. “Both carriers operate highly complementary networks, with (SCT) focusing on medium long-haul routes, and Tigerair (TGR) focusing on shorter-haul journeys,” (SCT) (CEO), Campbell Wilson said.
SilkAir (SLK), which ordered 23 Boeing 737-800s and 31 737 MAX 8s in 2012, has a fleet of 28 Airbus and Boeing airplanes. It operates more than >350 scheduled weekly flights to 12 countries.
September 2015: Scoot (SCT) retired its last Boeing 777-200 and has now become the first airline to operate an all-787 Dreamliner fleet. It has taken delivery of its seventh 787 out of an order for 20 of the type, split equally between 335-seat 787-8s and 375-seat 787-9s.
October 2015: News Item A-1: "Singapore Airlines to Transfer Jeddah Route to (LCC) Scoot" by (ATW) Jeremy Torr, October 15, 2015.
Singapore Airlines (SIA) will hand over its Singapore - Jeddah, Saudi Arabia schedule to long-haul, low-cost carrier (LCC) subsidiary, Scoot (SCT) from May 2016.
(SIA) said the move would “better optimize the utilization of the (SIA) Group’s resources” and would also increase (SCT)’s capacity on offer both to and from Jeddah.
The new service will fly direct 3x-weekly from Singapore’s Changi Airport to Jeddah’s King Abdulaziz International Airport, using Scoot (SCT)’s 335-seat Boeing 787-800 airplane.
(SIA) currently offers the same 3x-weekly service using 285-seat Airbus A330-300s, but with a one-stop schedule at Dubai.
This will be Scoot (SCT)'s first venture outside the north - south Asia region, and is its first wide body service to the Middle East or Europe. It is also the first indication of (SCT)’s previously mooted plans to push into the Middle East and European markets.
Scoot (SCT) (CEO), Campbell Wilson said the route would help the (SIA) group service “both commercial [passengers] as well as [those traveling to] the principal gateway for religious pilgrimages at nearby Mecca.” It will also likely offer a lower priced ticket range than the (SIA) service it replaces.
“We have long wanted to operate to Saudi Arabia,” Campbell said. “Scoot (SCT) looks forward to improving connectivity between Singapore and this important world city.”
The "Hajj route," as the Jeddah/Mecca route is known, has seen significant rise in interest from Southeast Asian carriers recently, with AirAsia X (ASX), Garuda Indonesia (GIA) and Philippine Airlines (PAL) all recently upgrading services or introducing new schedules to Jeddah.
News Item A-2: "SIA Subsidiaries to Increase Route Sharing" by (ATW)
Jeremy Torr, October 20, 2015.
The Singapore Airlines (SIA) group is consolidating its network among its subsidiaries, with long-haul low cost carrier (LCC) offshoot, Scoot (SCT) adding one of its Boeing 787s to an existing Tigerair (TGR) schedule to Guangzhou, China.
Tigerair (TGR), the regional (LCC) subsidiary of (SIA), currently operates a single daily flight from Singapore's Changi Airport to Guangzhou Baiyun International using Airbus A320 aircraft. From January 2016, Scoot (SCT) will add a parallel 787-9 service to the route to "jointly serve the market more efficiently," Tigerair (TGR) (CEO), Lee Lik Hsin said.
The route sharing announcement follows (SCT)'s plans to take over (SIA)'s Jeddah service from next year, and the imminent replacement of a 4x-weekly, SilkAir (SLK) ((SIA)'s regional full-service subsidiary) schedule to Hangzhou with a new 5x-weekly, Scoot (SCT) service, again using the long-haul carrier's 787s.
(SCT) Head of Commercial, Steven Greenway said that (SCT) was looking to expand to at least six new destinations in coming months, partly as a result of "much better coordination" between the (SIA) subsidiaries. The move also underlines the commitment given by (SIA) Chairman, Stephen Lee recently to promote a "progressive stepping up [of Scoot's (SCT)] co-operation with Tigerair (TGR)" to provide what he described as a "win-win" situation for both carriers (and their home hub at Changi Airport).
Both Scoot (SCT) (CEO), Campbell Wilson and Tigerair (TGR)'s Lee have flagged increasingly close ties between the two carriers, with Lee noting the move would also enable (TGR) to redeploy its current resources for expansion to new destinations.
There is also further consolidation to come; (TGR) added that the two carriers were currently "finalizing a similar arrangement for another route."
November 2015: News Item A-1: "Singapore’s Scoot (SCT) Starts Melbourne Service" by (ATW) Jeremy Torr, November 2, 2015.
Singapore-based long-haul, low-cost carrier (LCC) Scoot (SCT) has launched a new Singapore - Melbourne service using Boeing 787-8 airplanes on a 5x-weekly schedule. The 787-8 will be fitted with 314Y economy and 21C business-class seats.
The schedule from Singapore Changi to Melbourne Tullamarine will be the second Australian route (SCT) has opened up this year following the launch of the Perth schedule in February. It also services Sydney and the Gold Coast with direct 787 services. Scoot, the long-haul, lower-cost subsidiary of Singapore Airlines, has begun flights from Singapore (SIN) to Melbourne (MEL). The first flight on the 6,029 km route commenced on November 1. Melbourne becomes (SCT)’s fourth Australian route after Gold Coast, Perth and Sydney.
(SCT) (CEO), Campbell Wilson said the service was started because of “long received requests to fly to Melbourne,” and that the initial 5x-weekly schedule would be expanded to daily during peak seasons, such as over the year-end holiday period.
(SCT) will be competing directly with other local (LCC)s Jetstar (IMU), which also offers a 7X-weekly 787 service, and AirAsia X (ASX) (although the latter offers a one-stop Airbus A330 schedule from Singapore via Kuala Lumpur).
(SCT) is also promoting its interline deal with Virgin Australia (VOZ) that enables passengers to access second-tier Australian cities, including Adelaide, Uluru, Brisbane, Cairns, Canberra, Hobart, and Launceston.
(SCT) has seen a spate of new route launches recently, with the parent, the Singapore Airlines Group (SIA) re-allocating flights from its other SilkAir (SLK) and (SIA) subsidiaries to Scoot (SCT)'s fuel-efficient 787s, especially on medium-haul routes to China and the Middle East.
(SCT) has an order with Boeing for a total of 20 787 aircraft, and took delivery of two new aircraft in October 2015.
News Item A-2: "For Asia-Pacific (LCC)s, (MRO) is not Low Cost" by (ATW) Karen Walker, November 5, 2015.
Being a low-cost carrier (LCC) does not mean getting low-cost maintenance, a group of executives with Singapore-based (LCC)s agreed.
Speaking as panelists at the Aviation Week Network Maintenance Repair & Overhaul (MRO) Asia-Pacific conference in Singapore, executives from three airlines (Jetstar Asia (JSA), Scoot (SCT), and Tigerair (TGR)) named their top priorities in what they look for in a (MRO) provider.
(JSA) Head of Engineering, Ang Chee Keong, (SCT) Head of Engineering, Desmond Chew, and (TGR) Managing Director & Chief Operations Officer (COO), Ho Yuen Sang listed strong safety culture, reliability and responsiveness, when things go wrong among their must-haves.
“Simplicity is important for a low cost carrier (LCC), it’s essential not to make things too complicated,” Keong said. “And we have a strong safety culture, so we look for (MRO) partners with similar culture. There’s no such thing as low-cost maintenance”
Chew also listed safety culture as a top priority. “Just because we are a low cost carrier (LCC) does not mean everything we do has to be low cost. Safety is first.”
The executives noted that (MRO) costs in Singapore were becoming more expensive, while it was not possible to raise ticket prices in line with those increased costs. Keong said (JSA) was looking at potential options among (MRO) providers in other parts of Asia with lower labor costs, but (SCT)’s Chew pointed out that the cost of flying an airplane to an overseas (MRO) base for maintenance could outweigh any savings. “We always factor in the fuel costs of flying a plane to an overseas station to see if it makes economic sense. There’s a lot of considerations when deciding whether to work locally or overseas,” Chew said.
(TGR)’s Sang said another consideration in (MRO) provider selection was whether or not to go with an Original Equipment Manufacturer (OEM). “This is a big issue facing the industry. A lot of people are being squeezed out because they don’t have the [new aircraft] data, so you have no choice but to go to the (OEM). Third parties just don’t have the information, capabilities and data.”
Sang added that it was critical that an (MRO) provider understood the impact of delays in an airline’s schedule when things go wrong. “Some (MRO)s don’t understand that they have to support our network because if something bad happens, that delays an aircraft by a day, that affects four flights and maybe 1,000 people and that is not a one dollar impact. That goes to the (CEO),” Sang said.
A good (MRO) provider, Sang said, is a partner that “rises to the occasion” when there is trouble.
February 2015: News Item A-1: Singapore Airlines (SIA) group reported a net profit rise of +35% to +S$275 million/+$196 million for the three months through December 31, 2015, compared to a net profit of +S$202.6 million in the year-ago quarter. (SIA) cited lower fuel costs and a significant performance improvement from some of its subsidiary carriers for the profit increase.
The higher profit was achieved despite revenue dropping by -3.9% due to weaker yields in the period, which is (SIA)’s fiscal third quarter. Passenger yields fell -4.6% and cargo yield declined by -13.5%.
Cost savings were enough to overcome the revenue slide, however. Net fuel costs were down by -S$354 million, with lower oil prices offset somewhat by hedging losses of -S$72 million and -S$77 million in losses related unfavorable exchange rate movements.
The group’s operating profit more than doubled to +S$288 million for the quarter, with most of its subsidiaries boosting their results. The parent airline led the way with an operating profit of +S$181 million, thanks mainly to the fuel cost savings. Its passenger traffic rose +1% year-on-year with capacity dropping -1.2%.
Long-haul, low-cost carrier (LCC) subsidiary Scoot (SCT) achieved an operating profit of +S$18 million, reversed from a loss of -S$17 million a year earlier. (SIA) says this was Scoot (SCT)’s strongest-ever quarterly result. Although (SCT) grew capacity by +34% in the quarter, it boosted passenger traffic by +37%.
SilkAir (SLK) recorded an operating profit of +S$33 million, up from +S$18 million. Its capacity growth of +9.5% was not matched by traffic growth of +8.5%, however. Tiger Airways (TGR) also improved its operating profit to +S$9 million, versus +S$4 million in the same period in 2014.
(SQC) Cargo operating profit dropped to +S$2 million compared to +S$17 million a year earlier.
News Item A-2: "Scoot (SCT) Set to Launch first India services in March" by (ATW) Jeremy Torr, February 4, 2017.
Scoot (SCT) plans to launch services to at least three Indian destinations by the end of May 2016.
Subject to regulatory approvals, (SCT) said it will start flying to a south India destination from end March and will expand services over consecutive months to include “one south Indian metro and two destinations in north India.”
A (SCT) spokesperson said that until the Indian aviation regulator, the Directorate General of Civil Aviation (DGCA), gives approval it could not disclose exact destinations, but said “it is true we are starting services in India this year.”
(SCT) said it had completed the required ground handling and technical assistance groundwork to support the flights, but ruled out Mumbai as one of the new destinations. “Mumbai as a destination doesn’t suit our strategy,” it said.
(SCT) said it would concentrate on leveraging its existing synergies with other Singapore Airlines (SIA) operations.
(SCT) said that, to date, no network links are likely with (SIA) joint ventures (JV)s, including its Tata Sons full-service venture, Vistara (VST). “No tie-ups have been confirmed at this point [or] until we launch in India,” (SCT) said.
News Item A-3: Scoot (SCT) (CEO), Campbell Wilson said (SCT)’s transition to an all-Boeing 787 fleet is enabling the Singapore Airlines (SIA) subsidiary to finally achieve profitability, and predicted (SCT)’s financial performance will steadily improve.
(SCT)’s aircraft liveries and staff uniforms feature a bright yellow, but (SCT)’s balance sheet has been in the red for most of its four years of existence, putting a drag on parent, (SIA)’s earnings. But with the six aging 777s that comprised its initial fleet all retired last year, Scoot (SCT) believes its fleet of 10 787s, evenly split between 787-8 and 787-9 models, opens a new chapter.
(SCT) achieved an operating profit of +S$18 million/+$12.7 million during the quarter ended December 31, 2015, its best-ever result.
Speaking this week at the Singapore Airshow, Campbell touted cabin-interior rainbow lighting, 100% Wi-Fi connectivity, and unique 335-seat and 375-seat configurations on its 787-8s and 787-9s, respectively. “But it really means nothing if you’re not profitable,” he said. “Our unit costs have steadily declined, thanks in part to the 787 Dreamliner that gives us +20% better fuel efficiency compared to the 777.”
In the financial year starting April 1, (SCT) plans to grow capacity +49%. By 2019, its fleet will double to 20 787s. Wilson said that a +34% year-over-year capacity boost in the December quarter was exceeded by a +37% rise in traffic, citing it as validation of (SCT)’s rapid expansion plan.
Some 35% of (SCT)’s capacity is between Singapore and China, and (SCT) plans to add an 8th Chinese city to its network in the second half of 2016. “Despite the macro-economic issues in China, we’ve seen significant growth in the markets we serve,” Campbell said.
Singapore - Sydney is (SCT)’s longest route, but Campbell said flights to Europe are “a possibility” in the future.
“In our configuration, the 787-8 can reach about as far as Frankfurt and the 787-9 can reach London,” he said.
March 2016: "Scoot, Tigerair to Merge, Expand Reservation Systems" by
(ATW) Jeremy Torr, March 24, 2016.
Singapore-based long-haul, low-cost carrier (LCC) Scoot (SCT) and regional (LCC), Tigerair (TGR) will finalize a merger of their reservations systems by the end of (1H) 2016, (SCT) (CEO), Campbell Wilson said.
“This will make Tiger (TGR) our biggest partner,” he said. He said the two (LCC)s already shared ground handling and other operational facilities and costs, and that a more complete integration of ticketing systems would bring a greater ability to capitalize on potential opportunities across the two carriers.
Both (LCC)s are subsidiary airlines of parent Singapore Airlines (SIA), which Wilson says is working to develop long-term working structures, that are shared between the two carriers.
Wilson noted the need for a strong distribution system in Asia is essential, as many travelers still prefer to use travel agents to book their travel.
Wilson added that (SCT) would expand its fleet of 10 Boeing 787s with another 10 787s by the end of July 2019, which would enable it to add routes to India, China, and northeast Asia. “In (2H) 2016, we look to [begin] new routes to China, Japan, and Korea, but will make sure our [ticket] distribution systems are suitable, so we can keep our high load factors up,” he said.
May 2016: News Item A-1: "Singapore’s Scoot, Tigerair to Merge into Single (LCC) Holding Company" by (ATW) Jeremy Torr, May 19, 2016.
Singapore Airlines (SIA) plans to combine the management of its low-cost carrier (LCC) subsidiaries Scoot (SCT) (long-haul) and Tigerair (TGR) (regional) into a single body.
(SIA), the Singapore flag carrier has formed a new subsidiary called Budget Aviation Holdings, which will own and manage both (LCC)s following the recent de-listing of Tigerair (TGR) from the Singapore Stock Exchange.
The new entity will be headed up by Lee Lik Hsin, who was appointed as (CEO) of Tigerair (TGR) in early 2014, following a series of poor results. Scoot (SCT) founding (CEO), Campbell Wilson will “return to (SIA) in a senior position,” (SIA) said.
(SIA) (CEO), Goh Choon Phong said the move to a new (LCC) operating structure was made on the back of (SIA), the parent company’s buy-back for the majority of Tigerair (TGR) shares in late March 2016. It follows a preliminary agreement between the two (LCC)s to implement “wide ranging cooperation” across various marketing functions.
“We launched our general offer so that we could fully realize commercial and operational synergies between Scoot (SCT) and Tigerair (TGR),” Goh said.
Wilson recently said the carrier is “definitely looking to expand [more] services westward,” following its recent adoption of the Singapore - Jeddah route, previously operated by (SIA).
The new holding company structure “will allow for the [full] integration and sharing of key functions, such as in sales and marketing, Information Technology (IT), planning and operations,” (SIA) said.
Goh noted the new holding company structure “will drive a deep integration of our low-cost subsidiaries, which are important parts of our portfolio strategy in which we have investments in both the full-service and budget aspects of the airline business.”
In the short term, both carriers will maintain their individual branding (Goh said recently that “we would not rule out [a full merger]. But for the moment, we do see a benefit in [both (LCC)s] having their own separate identities.”)
A full merger would also demand a revision of a slew of landing rights and air operator’s certificate (AOC) permissions for the combined carriers, which could pose some anti-competition issues in Southeast Asia’s already crowded (LCC) market.
June 2016: "Value Alliance: the Hubs, Focus Airports and Routes Where Alliance Members Might Gain Synergies", by (CAPA), June 20,2016.
Since the Value Alliance was announced in May 2016 as the second low cost carrier (LCC) alliance, there has been industry interest about how and where the alliance can deliver synergies. The nine initial members of the Value Alliance include Cebu Pacific (CEB), Cebgo (SRQ), Jeju Air (JJA), Nok Air (NKA), NokScoot (NSC), Scoot (SCT), Tigerair Singapore (TGR), Tigerair Australia (TAU) and Vanilla Air (VNL).
Tokyo Narita is the alliance hub with more service from Value members (five) than any other. But Asia's most popular airports for Value members are not where the alliance has a local member: Taipei and Hong Kong.
In terms of frequency, Manila and Bangkok Don Mueang have the most Value flights, reflecting their local membership there. The local Value member based at an airport typically dominates the hub, accounting for over >90% of Value flights. That creates a strong feed network for other members but also (potentially) competition that may be too strong. Members overlap on only six routes so far and their combined frequency gives them a scale advantage against non-Value (LCC)s. Although it is premature to evaluate the effectiveness of the alliance (new members will join and existing members will grow) this analysis looks at where there are network opportunities for cooperation.
* Airports most frequented by Value Alliance are not member hubs.
There are services from three or more members of the Value Alliance at 15 airports in Asia. This includes Tigerair (TGR) and Scoot (SCT), which have the same ownership, but excludes Cebu (CEB) and Cebgo (SRQ), since (CEB) owns (SRQ). (TGR) and (SCT) are expected to merge, with only one brand surviving.
Five airports have services from four or more alliance members. The two most popular airports (Taipei Taoyuan (6) and Hong Kong (5)) are not local hubs for the Value Alliance. Three airports have services from four Value members: Hanoi, Osaka Kansai, and Tokyo Narita. Only Tokyo Narita is a Value hub (served by Vanilla Air (VNL)), although Osaka Kansai is a growing focal point for (VNL) and in time, will likely become a hub.
Taipei is home to two (LCC)s – Tigerair Taiwan (TTW) and V Air (VAX) (but neither is a member of Value (or of U-FLY)). Tigerair Taiwan (TTW) is 10% owned by the Tigerair Holdings but is not a member, and is expected to be wholly under control of the China Airlines (BEJ) Group, once the expected Tigerair (TGR)/Scoot (SCT) merger occurs. V Air (VAX) is owned by TransAsia (FSH) and has no partnership affiliations. TransAsia (FSH), a full service regional airline, is not a member of a global alliance.
It is not without coincidence that the most commonly served airports are in Northeast Asia. Taipei and Hong Kong are accessible from both Southeast Asia and northern Northeast Asia with narrow body aircraft, making the two airports accessible for all members. Only Jin Air (JIN) (not an alliance member) is a Northeast Asian wide body (LCC) operator, so Northeast Asia’s (LCC)s are restricted from flying deep into Southeast Asia.
In contrast, Southeast Asia has three wide body (LCC) operators that are belong to an alliance: Scoot (SCT), NokScoot (NSC) and Cebu (CEB). Cebu (CEB) can access Northeast Asia with narrow body aircraft, although it sometimes uses wide body aircraft on trunk/congested routes. There are services from three Value members at 10 airports, and all but three are Value member hubs.
* Measured by frequency, most services are at Value alliance member hubs.
This analysis next looks at the largest airports in the Value Alliance based on weekly frequencies. This analysis comprises the 21 largest airports (the 20th and 21st largest have the same number of frequencies). The six largest airports are all member hubs.
The four largest (Manila, Bangkok (DMK), Singapore, and Cebu) are significantly larger than the rest. Of the 10 largest airports based on member frequency, only two (Hong Kong and Taipei Taoyuan) are not member hubs.
* Largest Value Alliance airports are dominated by their members.
13 of the region's largest airports have more than >7 daily flights from alliance members. Each is dominated by its local alliance member. At the two largest (Manila and Bangkok (DMK)) the local alliance hub member operates 98% and 94% of all flights by the alliance. In other words, of all Value flights at Manila, Cebu (CEB) operates 98% at Manila, while NokScoot (NSC) and Nok (NKA) operate 94% of all Value flights at Bangkok (DMK).
A Value Alliance Member typically accounts for over 90% of alliance flights at its home. Four airports are around the 80% mark, while there is no Value Alliance member operating flights at Bangkok (BKK) (they instead operate out of Bangkok (DMK)).
* Value Alliance members overlap on six routes.
There is a possibility that the Value Alliance could help (LCC)s gain scale on routes, especially where due to infrastructure constraints ( slots, air traffic, bilaterals) organic growth may not be an option.
In the week commencing Jun12, 2016 the Value Alliance members overlap on only six routes. This excludes overlap only between Scoot (SCT)/Tigerair (TGR) (owned by the same company and expected to be merged) and Cebu (CEB)/Cebgo (SRQ) (Cebu (CEB) owns Cebgo (SRQ)). (CEB) has the most overlap (four routes) followed by Jeju (JJA) (three), Tigerair (TGR) and Scoot (SCT) (two) and then Vanilla Air (VNL) (one).
No route has more than >2 operators. The frequency split varies between relatively even and lopsided. As this analysis is focused on the opportunity to offer more flights, frequency (not seats) is considered. The use of wide bodies at Scoot (SCT), and sometimes Cebu (CEB), would alter a capacity share analysis.
* Value Alliance opportunity to link Northeast Asia with Southeast Asia.
The geography of east Asia means that (LCC)s cannot serve the entire region with existing narrow body technology, although (LCC)s in some markets can come close. The final analysis in this report considers the ability of the Value Alliance to link Northeast Asia with Southeast Asia, and vice versa.
Six of the members have routes between Northeast and Southeast Asia. Vanilla Air (VNL) operates wholly within Northeast Asia but is examining a Taipei base to use fifth freedom rights to fly to Southeast Asia. Cebu Pacific (CEB) has the greatest number of flights between Northeast and Southeast Asia. This is probably unsurprising given the Philippines' geographical position, which is more between the regions. Tigerair (TGR) and Scoot (SCT) have approximately 10 routes between the regions.
Evaluating the opportunity is complex: routes are often to points where there is no service from another Value member, or there is limited frequency, and it may not enable a same-day connection, or a connection within reason. Some connections would be circuitous. But as noted earlier, it is too soon to evaluate the opportunity for the alliance.
* Outlook: long haul operator, member with central geography, could bring opportunity but also competition.
The Value Alliance faces the same conundrum as full service alliances: adding members brings opportunities but also competition. A member that is more central between the regions (such as in Hong Kong or Taiwan) could enable more links and connection opportunities.
Alternatively, that member may prefer to serve points on its own. (As (CAPA) has previously recorded, some Value members are expected to work with HK Express outside the (LCC) alliance organizations). More long haul operations could mean that an airline gains access to the strong regional hub of a partner in a different part of Asia. Alternatively, this could preclude cooperation between other members.
The opportunities for the Value members today are varied, but they do exist. With time, the synergies within the alliance should become greater. Most critically, this is all being developed with minimal cost, unlike the high joining and membership fees of full service alliances. While the gains may not seem as significant, neither are the costs.
Conclusion: As (CAPA) has previously concluded of the alliance:
* Joining the Value Alliance should be an appealing option for Asia’s independent (LCC)s since the cost and risk of membership are small. At the May 16, 2016 launch event, executives representing the founding members stressed that the concept is to add incremental passengers without incurring additional cost or adding any complexities. The members said that they would not have joined, if they had not been able to retain their business models.
* The main objective is for each member to increase their brand awareness across Asia-Pacific. The main objective is for each member to increase their brand awareness across Asia-Pacific and augment their distribution network through cross-selling. The alliance members pointed out that most of their brands are not well known outside their respective home markets.
* The members expect that the alliance will only generate a small increase in their interline traffic volumes (at least in the initial phase).
* Interline traffic for most members is a very small part of their overall business (for some it has even been non-existent) and most members do not expect that interline traffic will ever account for a large share of their overall traffic.
* The Value Alliance essentially offers its members a nothing-to-lose alternative for attempting to increase transit traffic and attract passengers in new markets who are now flying with other airlines. Even if the alliance only brings each member a +1% incremental gain in passenger traffic, it can be deemed a success, given the limited cost and the simplicity of the new offering.
* Asia’s independent (LCC)s need to evolve and embrace new alternatives if they are to maintain their growth trajectory and succeed in an increasingly competitive marketplace.
October 2016: News Item A-1: Singapore Airlines (SIA) reported a net profit of +64.9 million Singaporean dollars/+$46.9 million for the 3 months through September 30, down by -S$148.7 million year-on-year (YOY).
The group’s operating profit dropped by -15.5% to S$109 million for the period, which was its fiscal 2nd quarter. A -S$174 million decline in costs was not enough to offset a -S$194 million fall in revenue.
The 2nd quarter was generally weaker than the results for the fiscal 1st half. (SIA)’s half-year net profit was +S$321.5 million, up +S$16.7 million from the same period a year earlier.
The mainline parent carrier saw passenger revenue decline -6.4% in the 1st half, with yield dropping -2.9% and load factor falling -1.9 points to 78.1% LF. Capacity was down -0.9%. Scoot (SCT) was once again the fastest-growing of the group airlines, with its capacity increasing +55.6% in the 1st half.
1st-half costs dropped by -4.6% for the group, mainly due to a -25.2% fall in net fuel costs. Costs excluding fuel rose +5.9%, partly due to capacity expansion by Scoot (SCT) and SilkAir (SLK).
Cargo revenue was down in the 1st half due to a -16.6% yield fall. The operating loss for the cargo division increased +S$33 million to -S$45 million. Cargo traffic actually increased faster than capacity growth, resulting in load factor rising +0.9 points to 61.6% LF.