Singapore’s Scoot sets sights on Greater Japan

by GEOFFREY TUDOR 

November 1st 2014

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Fleet expansion at Singapore’s spunky regional budget airline, Scoot,has set the route planners looking north for more business into Japan. Read More » Scoot flies to 13 destinations across the Asia-Pacific, “but by March 2016, we will have 11 aircraft, said CEO, Campbell Wilson, “so we are considering new points in Australia, China and Japan. India is also in our plans.”

Scoot serves Tokyo’s Narita from Singapore, via Taipei. Wilson told Orient Aviation it would be logical to fly to Osaka’s Kansai International airport in the second half of 2015. Other Japanese destinations include Nagoya’s Chubu International airport.

Scoot will phase out its B777s as its new all-B787 fleet arrives at the airline

The Singapore-Narita flight opened a year ago and has exceeded expectations, with an average load factor of 81% that climbed above 90% in July and August.

“Our assumption was that most of our passengers would be originating in Singapore, but now 55% are Japanese. That’s surprising as our market profile is low, but clearly shows there’s high potential demand in Japan need for a long-haul low-cost operator,” Wilson said.

 One of Scoot’s missions is to create new business for its parent company, and there are signs it is achieving that. “Everybody said, when we started flying from Singapore to Sydney, that there was no room for a newcomer. There were seven flights a day, including A380 service,” said Wilson.

“In just six months, we increased Singapore-Sydney leisure traffic by 69%. Contributing to our success on this route are our low fares, plus the fact that Singaporeans like Sydney and Australians like Singapore.”

Wilson also intends to increase transit passenger business by working closely with fellow Singapore Airlines Group subsidiary, budget carrier Tigerair. “Tiger is the ideal partner for us. They are a short haul, low-cost carrier and we are long-haul. About 34% of AirAsia X passengers are connecting to the airline from short haul parent, AirAsia. There’s plenty of opportunity for us to do the same now we have anti-trust immunity.”

Wilson said Scoot is adding to the Group’s network by flying to destinations which are not viable for a full service carrier like SIA. Scoot’s China routes are not economical for parent SIA. Typically, Scoot’s costs are 50% of SIA so the budget subsidiary can serve destinations SIA cannot profitably reach in an important market.

As to performance Wilson said: “We haven’t published any targets, but we are on plan. It takes years to go into the black. We’re reasonably happy. This year has been difficult. There’s been unrest in Thailand and the MH370 tragedy. Traffic between China and Malaysia had a problem.

“The Australian market has been a problem. We’re exposed to China, Thailand and Australia – all of which have had issues. But that’s life. Confidence in Australia is starting to return.

“As a long-haul LCC, we’re keeping our routes within the four to nine hours range. There’s plenty of opportunity in Asia for us. India and Japan and Korea are our limits. Long-haul flights beyond nine hours – to North America and Europe - are too costly.

Scoot’s latest development is the establishment of NokScoot, with Thailand’s low-cost carrier, Nok Air, to be based in Bangkok’s defacto LCC terminal, Don Mueang airport. One of the first routes for the new airline will be from Bangkok to Narita Tokyo in early 2015, subject to regulatory approvals.

Wilson said: “We’re reasonably satisfied. An airline has never been a finished product. As to where we are now, I think our team has done a great job.It’s been a journey of three phases. First was building a network and a fleet, next was establishing a stable base and third will be building our fleet from the arrival of our first Boeing Dreamliner later this year.

“For a two and a half year old airline, we’ve made a good start.”