Everything Scoot

[alberttky 0]

Scoot represents a radical change of pace for SIA but the new long-haul LCC is no pioneer

 

New Singapore Airlines long-haul low-cost subsidiary Scoot is doing everything it can to differentiate itself from its parent company but the carrier will likely end up looking a lot like Asia’s other long-haul LCCs, and for good reason: the success of AirAsia X and Jetstar’s long-haul unit provide ample components that are worth mimicking.

 

After considering an all-economy configuration, Scoot will follow both AirAsia X and Jetstar in offering a premium cabin upfront. While Scoot contemplated the purest of LCC models, it has decided to follow AirAsia X and Jetstar in offering a connection product. To facilitate potential codeshares Scoot will use Navitaire’s New Skies reservation system, which by no coincidence counts AirAsia X and Jetstar as two of its biggest customers.

 

Scoot is also following AirAsia X in striving to implement a wireless IFE solution although it is unclear if the technology will be available in time for Scoot’s mid-2012 launch.

 

Scoot is duplicating several elements of Jetstar’s close but separate relationship with its parent airline group, Qantas. Similar to Jetstar, Scoot will be independently run and managed. Matching at least the initial stated intentions of Jetstar’s long-haul operation, Scoot aims to complement its legacy sister carrier and bring in new business to its parent company rather than substitute existing business.

 

Scoot CEO Campbell Wilson promises that Scoot will not be used like SIA regional subsidiary SilkAir to take over any underperforming or leisure-focused routes from SIA. Time will tell if this holds true as Qantas, in first announcing in Dec-2005 the establishment of long-haul low-cost services under the Jetstar brand also said the new operation would be complementary and “not in any way be at the expense of” Qantas’ full-service mainline operation although later some Qantas routes to were handed to Jetstar.

Four routes within first year, including overlap with SIA

 

Mr Wilson told reporters at Scoot’s 1-Nov-2011 brand launch event in Singapore that the carrier will serve at least four routes within its first year. He said Scoot is still in the process of finalizing its initial network but confirmed Australia and China are high on its list. Mr Wilson says Scoot is open to secondary cities and alternative airports as well as primary hubs. AirAsia X has dabbled with secondary cities and alternative airports, like Tianjin and Hangzhou, but primarily because it was not given access by the Malaysian government to the associated primary cities, Beijing and Shanghai, respectively.

 

Scoot will likely operate alongside SIA on some routes while for others it will be the first SIA Group carrier. On the latter, SIA clearly will pursue opportunities for feed. Navitaire’s New Skies platform will give Scoot the functionality to codeshare with SIA’s in-house reservation platform although it has not yet been decided if a formal codeshare will be implemented from the beginning. At the very least Scoot will offer a transfer product which will allow its passengers to connect with SIA as well as other carriers using Changi Airport’s world-class transit facilities.

 

Navitaire powers ability for connections

 

Like AirAsia X and Jetstar, Scoot will be a point-to-point rather than network carrier. But the additional revenues that come with facilitating transfers (through codeshares, interlines and/or simpler transfer products that still allow for through check-in) is simply too good to pass up, as AirAsia X and Jetstar have discovered. “Singapore is a wonderful air hub ... we’ll certainly leverage that,” Mr Wilson promises without elaborating on the details of what the tie-ups will look like.

 

Connections come with extra cost and complexity but also typically bring in higher paying passengers, especially if they come from corporate channels. Scoot will not exclude any distribution channel and focus exclusively on internet bookings like the purist of short-haul LCCs. Like AirAsia and Jetstar, Scoot will be open to using travel agents and the GDSs. “We will take business from everywhere we can get it,” Mr Wilson says.

Large premium cabin, likely with only recliner seats

 

Corporate travel agents and SIA, which has one of the world’s most renowned premium products, will be particularly important to fill up Scoot’s relatively large premium cabin. Mr Wilson says Scoot will equip each of its B777-200s with 32 or 40 premium seats. This compares to only 12 to 18 premium seats currently in AirAsia X’s fleet and is closer to the 38 premium seats offered on Jetstar’s widebodies. The Jetstar model in this case is more relevant to Scoot as both carriers are subsidiaries of full-service airlines, giving them more potential premium business than a pure LCC group such as AirAsia.

 

With a relatively large premium cabin for an LCC, Scoot is clearly counting on business class connection passengers from SIA and SilkAir as well as premium seat sales on a point-by-point basis (AirAsia X relies entirely on the latter as all of AirAsia Group’s narrowbody fleet is in all-economy configuration). Matching the Jetstar premium product is also important as Scoot will likely be competing head to head with Jetstar on such routes as Singapore-Beijing and Singapore-Melbourne while competition with AirAsia X will only be indirect as it does not have long-haul services from Singapore. But AirAsia X is increasingly building transfer traffic, making the hub location irrelevant as AirAsia X, Jetstar and Scoot have the same origin and end points via different hubs.

 

Mr Wilson says Scoot’s premium seats will be 21in wide, which is 1in wider than the premium seats offered by AirAsia X and Jetstar on their A330s. Mr Wilson told CAPA the premium cabin will be in a 2-4-2 configuration. AirAsia X has a 2-2-2 configuration while Jetstar has a 2-3-2 configuration in its premium cabins although their A330 widebodies are narrower than Scoot’s B777s.

 

While Scoot has not disclosed details of the premium seat, it has specified that all seats will be furnished from Germany's Zim. Zim's only business class seat is a recliner-style seat, not a lie-flat seat or bed. Given lie-flat seats take up more cabin real estate than chair recliners, the lie-flat seats would have to be sold at a higher premium, and it is highly unlikely there is demand for upwards of 40 lie-flat seats. AirAsia X has 12-18 lie-flat seats while Jetstar's 38 seats are recliner-style. Jetstar has elected for this configuration as it provides for interoperability with Qantas' mainline domestic fleet; aircraft can be exchanged between the two carriers without having to remove and install new seats.

 

Featuring lie-flat seats risks cannibalising the parent company's all-important premium and high-yield cabin, assuming Scoot and SIA serve the same routes. Not only does AirAsia X not have that concern, it aims to offer a superior alternative to the regional business class seats frequent on intra-Asia routes from carriers by the like of SIA.

 

Mr Wilson said all of Scoot’s aircraft will have the same configuration with a total of about 370 seats but the carrier has not yet made a decision on whether to go with 32 or 40 premium seats. As both the economy and premium seats are being supplied by the same vendor, Zim, Scoot has the flexibility to wait before making a final decision on the exact seat count.

 

Mr Wilson confirmed the economy class will be in a 3-4-3 configuration, which is tighter than the 3-3-3 configuration used by SIA and other B777 operators but is used by some carriers including Emirates.

Scoot evaluating wireless IFE and may delay launch to accommodate new product

 

As CAPA reported two months ago, Scoot is looking to equip the entire cabin with wireless in-flight entertainment (IFE) systems. The carrier continues to evaluate proposals received from wireless IFE vendors.

 

As CAPA initially reported, Scoot’s launch date is partially contingent on the IFE systems being delivered quickly. Wireless IFE technology is new and it is unclear if any of the limited pool of vendors can deliver by Apr-2012, when the first aircraft is scheduled to go into the maintenance hangar for retrofit. If a vendor agrees over the next couple of months to commit to supply kit starting sometime in 2Q2012, Scoot can launch with its preferred solution although may slightly delay the launch to accommodate the vendor.

 

However, if it becomes clear the product will not be ready for delivery in 2Q2012, Scoot will have to operate its initial fleet without wireless IFE. Under this increasingly likely scenario, it could opt for an interim solution until the preferred solution becomes available. Scoot prefers to launch with wireless IFE but cannot afford to delay its launch by more than a month or two. The wireless IFE solution is clearly preferred as it results in a lighter aircraft as traditional seatback screens and equipment boxes are not required. It would also allow Scoot to sell video content that can be accessed via passengers’ own devices or iPads that could be rented for a fee.

 

Initial focus on Australian and Asian routes; Africa and Europe from 2014

Mr Wilson says the aim is to launch services “before the end of 1H2012”. Scoot is now on track on have its operators’ certificate by the end of 1Q2012.

 

Mr Wilson confirmed the carrier will have four B777-200s operating by end of 2012 and a fleet of 14 ex-SIA B777s (a mix of B777-200s and B777-200ERs) by mid-2016, as first reported by CAPA two months ago. The B777-200ERs, which will start arriving in 2014, will allow Scoot to serve Africa and Europe, markets it is currently examining for its second phase. Initially Scoot will stick to Asia and Australia and routes of between 4 and 10 hours long, given the more limited range of the B777-200s. “We need to walk before we run,” Mr Wilson said.

Product unbundling

 

Scoot is pursuing the same unbundling strategy as AirAsia X, Jetstar and most LCCs, offering no complimentary frills. Items such as food and check-in luggage (at least for economy class passengers) will be offered a la carte with passengers “paying only for that what matters to you”. The unbundling strategy will allow Scoot to keep average economy fares 40% lower than legacy carriers, which in Asia offer several frills including complimentary food, drinks, check-in luggage and IFE.

 

The IFE systems and seats are two of Scoot’s significant pre-launch investments. Mr Wilson expects the carrier will spend SGD50 million to SGD60 million before its first flight. SIA Group has capitalized the new subsidiary with an initial tranche of SGD283 million.

 

A new culture - 'Scootitude'

 

While Scoot clearly benefits from SIA’s huge cash coffers, Mr Wilson hopes to put in place a completely different culture. Mr Wilson went out of his way during the branding press conference to talk about Scoot’s culture. And he came out in a bright yellow polo shirt – far different than the dark suits typically worn by SIA executives.

 

Mr Wilson repeatedly referred to the new carrier’s culture as “Scootitude” which he hopes will stand for fun-spirited, open, honest, engaging and quirky. The idea is to be unique and not have a name with an Air, Airlines or Airways. “It’s not your everyday airline name because this is not your ordinary airline,” Mr Wilson says.

 

Mr Wilson says he strives to develop a “small family atmosphere”. Scoot will not be based at the gigantic SIA headquarters facility but in a cramped area at Changi’s Terminal 1, where Jetstar Asia also has its modest headquarters. Mr Wilson says the entire Scoot staff now works in a single room and has the same kind of desk. There are no separate offices for executives.

 

Once flights launch, the crews will use the same offices to get their pre-flight briefings, furthering the “family atmosphere”. Mr Wilson expects “for the first few years at least” the staff will know all the crew on a first name basis. SIA, which now operates over 100 widebody aircraft, is now way too large to have a family atmosphere and SIA’s culture is “not relevant to us”.

 

Scoot expects to hire 52 pilots, 240 to 250 flight attendants and 30 to 40 ground staff by the end of its first year of operations. Mr Wilson says recruitment will begin in early 2012 with the emphasis on hiring people with the “right attitude, spirit and personality”.

 

In terms of labour costs, Scoot will benchmark not against SIA but other long-haul LCCs. The emphasis will be on productivity with pay based primarily on hours worked.

 

Mr Wilson also emphasized that Scoot “is not beholden to use suppliers of SIA”. It currently has a tender out to select a handling agent for its Changi base and a maintenance provider. While it will initially operate from Changi’s Terminal 2, which is now used for all SilkAir flights and some SIA flights, Mr Wilson’s preference is to use the budget terminal if it is expanded later to accommodate widebodies.

 

Scoot’s initial administrative staff includes 11 executives and department heads that have been seconded from SIA. These 11 employees, which have been joined by a similar number of non-SIA employees, were brought in as Scoot needed airline experienced people in the initial start-up phase to help the carrier establish a safe, punctual and reliable airline. Mr Wilson says beyond these 11 there will not be any more secondments from SIA and the idea is for the 11 to move back to SIA and eventually replaced by new hires “with pure Scoot DNA”.

 

Mr Wilson later clarified that the 11 employees seconded from SIA will have the option of staying at Scoot but will have to server their ties with SIA. Mr Wilson himself is one of these 11. He will not have to decide between returning to SIA or staying with Scoot anytime soon, but since he says he already has “Scoot DNA”, it seems his decision is practically already made.

 

Outlook: Scoot may not be a pioneer but that doesn't mean it can't be profitable

 

While part of the same group of companies, Scoot will clearly not be another SIA. But whether it is successful at adopting the kind a culture evident at a pure independent LCC such as AirAsia remains to be seen. SIA is a conservative company with a conservative culture. It will be challenging to completely distance Scoot from those traits.

 

The fact SIA is so conservative caused a stir when the group decided earlier this year to launch a long-haul low-cost carrier. But the SIA Group has clearly studied the long-haul low-cost model from top to bottom and saw an opportunity. As Mr Wilson said, SIA still expects to pursue growth in its own market while Scoot will grow in a new market.

 

In executing the bold new strategy outlined by SIA, it comes as no surprise that Scoot has decided to adopt several elements of the long-haul business model pioneered by AirAsia X and Jetstar. SIA is a smart and studious company and taking the best of the best is what one would expect SIA to do. Not surprisingly AirAsia Group CEO Tony Fernandes quickly responded following the Scoot brand announcement that Scoot is “copying” AirAsia X and SIA has “to play catch up”. Mr Fernandes took another shot at SIA, saying the group “has no creativity” and is “trying to do too much”.

 

Scoot will probably never be included in the LCC history books like the chapters Mr Ferndanes has written in establishing AirAsia and AirAsia X. But while being a pioneer can provide important first mover advantage, it also critical to join a trend before it’s too late. With SIA's only very recent attempt to become more involved with Tiger, SIA joined the party too late. The long-haul low-cost trend, however, has just begun, making SIA’s bet with Scoot risky but potentially more rewarding. Other carriers throughout Asia and the world will be closely monitoring Scoot’s developments.

 

http://www.centreforaviation.com/analysis/scoot-represents-a-radical-change-of-pace-for-sia-but-the-new-long-haul-lcc-is-no-pioneer-61768

[V Wong 0]

I know Dato' TF used to work for Sir Richard Branson, no doubt some of the impression would come from the Virgin. So how so not original? If AK is really a copycat, how would it still win the best low cost airlines consecutively? Does it copy from anyone to initiate the zero fares?

 

 

Ryanair zero fare, 1p fare, etc.. been there, done that by others

[Mike P 0]

Scoot represents a radical change of pace for SIA but the new long-haul LCC is no pioneer

 

New Singapore Airlines long-haul low-cost subsidiary Scoot is doing everything it can to differentiate itself from its parent company but the carrier will likely end up looking a lot like Asia’s other long-haul LCCs, and for good reason: the success of AirAsia X and Jetstar’s long-haul unit provide ample components that are worth mimicking.

 

http://www.centreforaviation.com/analysis/scoot-represents-a-radical-change-of-pace-for-sia-but-the-new-long-haul-lcc-is-no-pioneer-61768

 

So they're not ruling out that they might follow some idea of the existing LCC like AirAsia X then...

[BC Tam 2]

Why the need to be so fixated about who is copying who ?

Mere bragging rights ?

(bear in mind though us Malaysians are ranked major 'copiers' of the world )

[Mike P 0]

Why the need to be so fixated about who is copying who ?

Mere bragging rights ?

(bear in mind though us Malaysians are ranked major 'copiers' of the world )

 

I don't really mind the copy, it's more like observing and learning and adapting and then improving. It's an inspiration.

 

So the Scoot is going to operate at Budget Terminal? I supposed Changi has to expand the Budget Terminal to give more rooms of growth of the LCC.

[BC Tam 2]

So the Scoot is going to operate at Budget Terminal? I supposed Changi has to expand the Budget Terminal to give more rooms of growth of the LCC.

Nope, budget terminal not able to accomodate widebodies apparently (refer flee's reply #122 above)

Going to operate from T2 - another thing copied from Air Asia

[Mike P 0]

Nope, budget terminal not able to accomodate widebodies apparently (refer flee's reply #122 above)

Going to operate from T2 - another thing copied from Air Asia

 

Haha, the whole Budget Terminal has already copied from LCCT.

[dean hizudy 0]

operating from Terminal 2,so they will use the aerobridges?

[Cheng Long 0]

Haha, the whole Budget Terminal has already copied from LCCT.

 

If I'm not mistaken, Singapore wanted to build the budget terminal first.. Realizing this, Malaysia quickly built one of our own and completed them earlier than our tiny red dot neighbour.. And apprently our LCCT is just temporarily, supposedly more suited for cargo, so we are building another one now..

[Mike P 0]

If I'm not mistaken, Singapore wanted to build the budget terminal first.. Realizing this, Malaysia quickly built one of our own and completed them earlier than our tiny red dot neighbour.. And apprently our LCCT is just temporarily, supposedly more suited for cargo, so we are building another one now..

 

Hur really? I thought LCCT appeared in the news first before the budget.

[flee 5]

Chen Long is correct with the facts.

 

MAHB loves dishing out contracts. That is why they keep building temporary LCCTs that will later be converted to cargo terminals!

[Waiping 12]

Chen Long is correct with the facts.

 

MAHB loves dishing out contracts. That is why they keep building temporary LCCTs that will later be converted to cargo terminals!

 

Reminds me of the one at KCH that can hold just 1 A320 aircraft.

[BC Tam 2]

Reminds me of the one at KCH that can hold just 1 A320 aircraft.

But that one you (presumably) don't get soaked when the sky decides to open up, unlike at BKI's T2

[flee 5]

AirAsia X in competitive mode, upgrading offering

 

PETALING JAYA: AirAsia X (AAX) will ramp up its products and services and review its network to defend the airline's leadership position in the long haul, low cost carrier business in Asia after Singapore Airlines (SIA) launched its own similar frills-free service named Scoot.

 

Scoot will take to the skies in the middle of next year but AAX wants to improve its customer service to be at par with that of full service carriers like Cathay Pacific and SIA, and is contemplating investing more money to defend its lead position.

 

“We are using this opportunity to upgrade our offering. We have a headstart, the fleet and diverse route network. We are definitely expanding and will keep flying popular routes that would be strategically beneficial for Malaysia,'' said AAX chief executive officer Azran Osman-Rani.

 

He said “we are trying to improve every aspect of the model and to have the same customer services standards like Cathay Pacific and SIA in how we deal with the customers. We will invest more and upgrade and that is how we will compete. Our value proposition is cheaper fares and the same reliability as full service carriers.''

 

“Scoot is entering a segment that we have a lead in and we want to make sure we remain in the lead. Operationally, we have the lowest cost unit and we want to remain low cost to compete. The completion of KLIA2 is also critical to us and if it gets delayed, we will be at a disadvantage,'' he said.

 

Azran added that the airline's model allowed it to offer 30%-50% lower fares (compared with full service airline fares).

 

“We have the same level of on-time performance and reliability of full service carriers like Cathay and SIA.

 

“This year it is 90% on-time performance, which is better than Cathay's published numbers. We are definitely the best in class for engineering reliability,'' he said.

 

Azran said the airline was reviewing its network but would not make drastic changes.

 

The airline has 11 aircraft currently, flying to 14 destinations and will take delivery of two new aircraft in 2012.

 

The entry of Scoot, although only to begin in the middle of next year, will certainly change the dynamics of the long haul, low cost game. The fight for customers is not just between AAX and Scoot but also AirAsia and Jetstar, which is also operating from Singapore.

 

Even the full service carriers will feel the heat with one new player in the playground since there are signs of an economic slowdow and going by the 2008 slowdown, many companies have opted to fly low cost to keep their cost down.

 

During a press conference in Singapore yesterday, Scoot CEO Campbell Wilson said the airline would use four B777-400 aircraft initially to fly to four or more cities in Australia and China. The focus is on destinations that are five to 10 hours from Singapore. The airline intends to charge 40% less for tickets than full service carriers.

 

Azran said he was not too worried about Scoot, “for the same reasons, we do not worry like the way Tiger Airways entered the marketplace years ago. But competition does push us to become better and leaner. We do not run away from competition,'' Azran said.

 

It did not take long after Wilson's media briefing for the tweeting community to poke fun at the choice of the name Scoot. Some say it was short for Scooter, others said another airline should be formed to be called Ves, short for Vespa.

 

And the boss of AirAsia Tan Sri Tony Fernandes also took to poking fun at Scoot by tweeting, “they (are) copying Azran and have to play catch-up. SIA has no creativity. A confused puppy as an airline. Confused. Trying to do too much. Great for AirAsia.''

 

Wilson had this explanation for Scoot - “we chose the name Scoot' for many reasons, not least because its different.

 

“Rather than the tried and tired airlines' this, airways' that or air' yawn, it's short, sharp and snappy. It stands out. It's geographically independent, and can be a verb or a noun.

 

“Besides difference, it conveys spontaneity, movement, informality and a touch of quirkiness - all attributes we intend this company to be known for.''

 

Source

[alberttky 0]

I wonder what the callsign is gonna be.

[BC Tam 2]

..... we are trying to improve every aspect of the model and to have the same customer services standards like Cathay Pacific and SIA in how we deal with the customers .....

Ouch !

So who is the copycat and lacking creativity now ?!

[Mike P 0]

Ouch !

So who is the copycat and lacking creativity now ?!

 

This is not called copycat, this is to neutralise the standard of service, not copying the products and services.

[flee 5]

This looks like a better illustration for Scoot's livery. From A.net forummer 9VSWR:

 

[V Wong 0]

Ouch !

So who is the copycat and lacking creativity now ?!

 

Great one ! ...Confused. Confused puppy

Edited November 3, 2011 by V Wong

[T Azahan 1]

I wonder what the callsign is gonna be.

 

"VESPA 6037 heavy........"

 

"RT: @tonyfernandes: They are. They copying azran and have to play catch up. SIA has no creativity. A confused puppy as an airline. Confused. Trying to do to much. Great for airasia. RT @saiwanstar: SQ new budget carrier called SCOOT? Aiyo.. Sounds a man in a hurry"

 

Whatever .. pls bring on Scoot!

 

Oh c'mmon Tony. Everyone copies and learns from others' mistakes. Have you forgotten on how u started before?? You are already strong waaat.......

[flee 5]

The rationale for Singapore Airlines' Scoot and why it is not a long-haul version of Tiger

 

Those new to the launch of Singapore Airlines' low-cost long-haul carrier, whose name was announced as "Scoot" on 1-Nov-2011, seem to be confounded by two questions: what is its market rationale, and is it just a long-haul version of embattled Tiger Airways?

 

In brief, Scoot's launch is fuelled by the rapid rise of potential low-cost travel within, around and to/from Asia. The carrier is anything but a long-haul version of Tiger Airways.

 

Here is a full explanation.

[GeO 0]

I wonder what the callsign is gonna be.

 

Scooty 8891 maybe? LOL...

[Mike P 0]

The rationale for Singapore Airlines' Scoot and why it is not a long-haul version of Tiger

 

Those new to the launch of Singapore Airlines' low-cost long-haul carrier, whose name was announced as "Scoot" on 1-Nov-2011, seem to be confounded by two questions: what is its market rationale, and is it just a long-haul version of embattled Tiger Airways?

 

In brief, Scoot's launch is fuelled by the rapid rise of potential low-cost travel within, around and to/from Asia. The carrier is anything but a long-haul version of Tiger Airways.

 

Here is a full explanation.

 

Dropping and shrugging off the passengers...

[Sandeep G 1]

Source: Straits Times

Source: CAPA

Well... looks like the Johor Straits Air-War may officially kick off.

 

SCOOT has just announced its FIRST destination will be SYDNEY.

 

Wonder how the reaction will be from TF? Also, I can suspect that with the present high volume of talks between Joyce/Fernandes and the new team at MAS (Not remembering their names until they stick it out and turn the airline around) that the Minister of Transport will be urged to give up this sector to AirAsiaX!

 

I can only imagine that this really is a tit-for-tat move, but strategic none-the-less for SCOOT.

 

SQ loads into SYD are reasonably healthy in the premium end, and I suspect this will open the eyes of JetStar (who recently launched SIN-PEK) and QF who enjoys healthy loads too on SYD-SIN albeit with transfer traffic to Europe.

Edited December 1, 2011 by Sandeep G

[flee 5]

I can only imagine that this really is a tit-for-tat move, but strategic none-the-less for SCOOT.

 

SQ loads into SYD are reasonably healthy in the premium end, and I suspect this will open the eyes of JetStar (who recently launched SIN-PEK) and QF who enjoys healthy loads too on SYD-SIN albeit with transfer traffic to Europe.

Good strategy by Scoot - should start up with a route where the competition is at its weakest.