Singapore Airlines multi-brand strategy evolves with Scoot, Tigerair interlines and loyalty tie-ups

[flee 5]

Singapore Airlines (SIA) is approaching a critical juncture with its multi-brand strategy as the group reviews its overall network and pursues new synergies between its four airline brands. The transition of short haul LCC Tigerair from a partially owned affiliate to a majority owned subsidiary has particularly opened up opportunities for medium/long haul LCC subsidiary Scoot and the overall group.

SIA recently began selling Scoot operated flights and is now looking at also forging an interline arrangement with Tigerair. Placing full service and even premium passengers on budget brands was previously unthinkable for SIA but has become a necessary and sensible step as Scoot and Tigerair give the group access to over 20 additional destinations.

SIA’s frequent flyer members can also now accrue and redeem points on Tigerair and Scoot, another recent development that highlights the strategic shift in the group’s multi-brand strategy. SIA is committing to improving the position of its two budget brands, which for now remain unprofitable but are critical components to the group’s long term strategy.

Tigerair and Scoot give SIA more than 20 additional destinations: http://centreforaviation.com/analysis/singapore-airlines-multi-brand-strategy-evolves-with-scoot-tigerair-interlines--loyalty-tie-ups-250235

[Mohd Suhaimi Fariz 2]

Still not enough.

 

Why retain Tigerair brand still? Just make it Scoot regional & have their flights bookable on Scoot site a la AirAsia

[Kenny Sing 0]

ain't tigerair flying the short haul low cost sector? it should be that way. this is the beauty side of SIA group (from premium long haul, down until low cost short haul) that MAS fails to duplicate. They have firefly flying short haul for thin route but that is not enough as firefly should act as the feeder airline to MAS. Firefly used to have jet ops, but being call off due to "money losing", i believe it's not the case as they flying KUL - BKI sector and it should be a money making sector. I heard air asia volume is affected following FY jet ops. So, it should be a feasible ops, just that under some political issue they force to call it off, bad case for consumer, good for industry player like air asia for example.

[jani 0]

Is SQ's model really "beautiful"? Too many brands in my opinion. Not saying MH is any better. But to have Scoot, Tiger and Silk Air is probably one too many.

[JuliusWong 0]

The another confused airline is up north....

 

1. Thai Airways
2. NokScoot
3. Nok
4. Thai Smile

Thai Smile itself has changed their business model multiple times since its inception.

[flee 5]

Still not enough.

 

Why retain Tigerair brand still? Just make it Scoot regional & have their flights bookable on Scoot site a la AirAsia

That day might come in the future - remember, Tigerair has very different shareholders to SIA whereas Scoot is a 100% subsidiary. So to get it from an investment to a partly owned subsidiary is some progress already. Give it a few more years.

 

Funny why SIA excluded Silkair in this new arrangement...

ain't tigerair flying the short haul low cost sector? it should be that way. this is the beauty side of SIA group (from premium long haul, down until low cost short haul) that MAS fails to duplicate. They have firefly flying short haul for thin route but that is not enough as firefly should act as the feeder airline to MAS. Firefly used to have jet ops, but being call off due to "money losing", i believe it's not the case as they flying KUL - BKI sector and it should be a money making sector. I heard air asia volume is affected following FY jet ops. So, it should be a feasible ops, just that under some political issue they force to call it off, bad case for consumer, good for industry player like air asia for example.

Last year, I flew to LGK for RM 49 one way. MH does not need FY to do its own version of LCC - the mainline is perfectly capable of that. As the airline has now shrunk, it is probably best not to fragment it any further. Otherwise, fixed costs will be too high. Besides, FY is profitable - so it is probably best to keep it that way.

Is SQ's model really "beautiful"? Too many brands in my opinion. Not saying MH is any better. But to have Scoot, Tiger and Silk Air is probably one too many.

Agree - there is insufficient market segmentation. SIA now has four airlines operating different types of aircraft and different business models. That makes it harder to achieve low unit costs.

The another confused airline is up north....

 

1. Thai Airways
2. NokScoot
3. Nok
4. Thai Smile

Thai Smile itself has changed their business model multiple times since its inception.

Thai is a government owned entity - apart from having so many airlines, they also think they need to "test drive" every airliner ever produced... Just look at their fleet, past and present! Like Malaysia, taxpayers are paying for their indulgence.

[Kenny Sing 0]

Last year, I flew to LGK for RM 49 one way. MH does not need FY to do its own version of LCC - the mainline is perfectly capable of that. As the airline has now shrunk, it is probably best not to fragment it any further. Otherwise, fixed costs will be too high. Besides, FY is profitable - so it is probably best to keep it that way.

 

agree, i assuming you fly from KUL to LGK? but if MH utilise FY further, they can deploy their B738s for more lucrative route. Unless you have cargo to load else it's better to deploy ATR as you can play aroudn with your ticket pricing, and the overhead cost of 738 vs ATR to fly LGK leg will be higher, i believe when the passenger pax exceed certain numbers, jet will excel props vice versa. So, MH needs to play around the flexible arrangment on the fleet deployment, to maximise revenue and the profit. Though in theory this sounds good but i believe there's many procedure things to do like flight planning bla bla bla stuffs.

[flee 5]

agree, i assuming you fly from KUL to LGK? but if MH utilise FY further, they can deploy their B738s for more lucrative route. Unless you have cargo to load else it's better to deploy ATR as you can play aroudn with your ticket pricing, and the overhead cost of 738 vs ATR to fly LGK leg will be higher, i believe when the passenger pax exceed certain numbers, jet will excel props vice versa. So, MH needs to play around the flexible arrangment on the fleet deployment, to maximise revenue and the profit. Though in theory this sounds good but i believe there's many procedure things to do like flight planning bla bla bla stuffs.

Yes it is KUL-LGK-KUL for RM 98.

 

FY is a 100% subsidiary of MAB - so whatever results they report will be consolidated with MAB.

 

If FY were to operate from KUL, additional fixed costs will be incurred. So I am not sure if FY jet will be as profitable as MH, now that it has restructured and slimmed down. It should be interesting to look at MAB's CASK now compared to the bad old days.

 

If MAB were to give FY the go ahead for jet ops, I think that they should just hand over all thirty five B738s to them. That way, they will have better economics. MH can then focus on the medium to long haul routes.

[Kenny Sing 0]

Yes it is KUL-LGK-KUL for RM 98.

 

FY is a 100% subsidiary of MAB - so whatever results they report will be consolidated with MAB.

 

If FY were to operate from KUL, additional fixed costs will be incurred. So I am not sure if FY jet will be as profitable as MH, now that it has restructured and slimmed down. It should be interesting to look at MAB's CASK now compared to the bad old days.

 

If MAB were to give FY the go ahead for jet ops, I think that they should just hand over all thirty five B738s to them. That way, they will have better economics. MH can then focus on the medium to long haul routes.

 

i believe FY wouldn't operate from KUL if using their props, not sure KUL doesn't welcome prop ops, or what, i doesn't seems like seeing props in and out KUL.

 

if FY to take MH's jet ops, that would be good as they can deploy their resources better. Just wonder why they not executing it until now. this plan seems like lingering for some time around ever since post Idris Jala era.

[KK Lee 5]

 

i believe FY wouldn't operate from KUL if using their props, not sure KUL doesn't welcome prop ops, or what, i doesn't seems like seeing props in and out KUL.

 

if FY to take MH's jet ops, that would be good as they can deploy their resources better. Just wonder why they not executing it until now. this plan seems like lingering for some time around ever since post Idris Jala era.

 

Turboprop is banned from KUL since the beginning, slow speed was the reason given.

[Kenny Sing 0]

 

Turboprop is banned from KUL since the beginning, slow speed was the reason given.

 

"kudos" to Malaysia. you can ban turboprops from KUL where else Changi able to handle props (though they might move it to Seletar in the future), i personally don't think that KUL traffic is way busier than Changi. It shows how efficient our people vs our neighbour country.

[Mohd Suhaimi Fariz 2]

"kudos" to Malaysia. you can ban turboprops from KUL where else Changi able to handle props (though they might move it to Seletar in the future), i personally don't think that KUL traffic is way busier than Changi. It shows how efficient our people vs our neighbour country.

Developing SZB as a turboprop airport is a good thing to cater for business folks because it's far easier to fly out of SZB - I remember taking the early morning FY flight to SIN & it was packed with people, 95% of them traveling for business.

[Chris Tan 0]

 

"kudos" to Malaysia. you can ban turboprops from KUL where else Changi able to handle props (though they might move it to Seletar in the future), i personally don't think that KUL traffic is way busier than Changi. It shows how efficient our people vs our neighbour country.

Changi isn't too thrilled about turboprops either. They've stopped allocating additional slots for those planes.

 

Frankly, I don't think looking down on KLIA is fair in this case. SZB is well suited to be a turboprop hub.

Edited November 3, 2015 by Chris Tan

[JuliusWong 0]

Developing SZB as a turboprop airport is a good thing to cater for business folks because it's far easier to fly out of SZB - I remember taking the early morning FY flight to SIN & it was packed with people, 95% of them traveling for business.

True, hence FY has all the more reason to charge exorbitant fee for SIN out of SZB, which is totally understandable. They wanted more slots for SIN but Changi put a stop until the new Seletar Airport is up running.

[Kenny Sing 0]

Changi isn't too thrilled about turboprops either. They've stopped allocating additional slots for those planes.

 

Frankly, I don't think looking down on KLIA is fair in this case. SZB is well suited to be a turboprop hub.

 

i ain't looking down on KLIA, i'm looking down on the reason given to ban props from KUL with the reason "too slow", simply like those ministers that ask us to wake up in the morning to use alternative route to avoid toll charges.

In fact KLIA is a mega project that we only see only like 30-40% of the total plan nowadays.

 

Of course SZB should be develop as it can still serve it's economy value. I'm interested on Seletar airport re-open as props hub though, whether all prop ops will shift from Changi like what we implement here KUL vs SZB.

[Amirul Mazlan 0]

KUL with 3 runways should not give silly excuse of banning ATR or any turboprop aircrafts.

[Mulyadir Fitri 0]

Operating out of SZB is an advantage to both FY and OD. It is that reason they are able to charge a premium price,proximity to KL. Don't think they will bother to bring their props to KUL even if prop ops are allowed.

Edited November 4, 2015 by Mulyadir Fitri

[kandiah k 0]

Don't airports such as JFK, AMS and EWR serve these turboprop aircraft too?

[alberttky 0]

Don't airports such as JFK, AMS and EWR serve these turboprop aircraft too?

I lost count on how many runways AMS have.

 

JFK and EWR (and other busy US airports) have a tendency of clearing pilots for visual approach (weather permitting) therefore they can reduce separation between traffic and thus increase runway capacity. KUL / SIN everything is ILS ILS ILS...

[Kenny Sing 0]

I lost count on how many runways AMS have.

 

JFK and EWR (and other busy US airports) have a tendency of clearing pilots for visual approach (weather permitting) therefore they can reduce separation between traffic and thus increase runway capacity. KUL / SIN everything is ILS ILS ILS...

I do have impression that malaysia airport is quite conservative or i would say more safety oriented.

 

Operating out of SZB is an advantage to both FY and OD. It is that reason they are able to charge a premium price,proximity to KL. Don't think they will bother to bring their props to KUL even if prop ops are allowed.

True, agree. but if the prop is meant to provide connectivity from 2nd tier airport to KUL then it do make some sense. you don't need a jet ops from IPH to KUL for connection purpose do you?

 

KUL with 3 runways should not give silly excuse of banning ATR or any turboprop aircrafts.

 

KUL masterplan is 4 runways.... even KLIA 2 open they still insist for 2 runway ops, well, still can cope i believe. KUL runway haven't reach it's cap yet. Still some distance away from being max cap.

[JuliusWong 0]

Breaking news: Singapore Airlines formally make a takeover offer for Tigerair.

 

www.straitstimes.com/business/companies-markets/sia-makes-takeover-offer-for-tigerair#xtor=CS1-10

[Sandeep G 1]

Turboprop is more suited for SZB as the airport is considered noise sensitive due to the built up areas surrounding. Personally, the turboprop choice at SZB is fantastic and can be expanded to cater to the increased O&D traffic ex-KL - the lack of rail infrastructure in the past further elevated SZB position as a domestic hub. Domestic services from KLIA should primarily be for Sabah/Sarawak and for interlining/transfer pax arriving internationally to major destinations in the peninsular.

 

Additionally, the airport is perfect for executive jet travel, VIP movements and for military/police operations. As a major MRO facility - it too is ideal, but what happens when (if) MH moves out would be interesting. The infrastructure is ideal for a third party to move in and take over.

Back to topic:

Yes, TR is finally headed to be under the complete sovereign helm of SIA. This is much needed, although financially it will take time to consolidate... (Bonuses-be-damned?!)

 

I would expect a further Scoot-Tiger consolidation post takeover. Perhaps even a rebranding of the latter into the former. Ultimately, the SIN hub choice will remain número uno given the regional geo-political and economic landscape.. KLIA and Malaysian based carriers stand to lose the most - especially with the lack lustre approach to infrastructure building (KLIA2) and upkeep (KLIA1). Simple remedy for a simple problem yet always over complicated by greedy people with KPI's and deep (but empty) pockets

[JuliusWong 0]

Turboprop is more suited for SZB as the airport is considered noise sensitive due to the built up areas surrounding. Personally, the turboprop choice at SZB is fantastic and can be expanded to cater to the increased O&D traffic ex-KL - the lack of rail infrastructure in the past further elevated SZB position as a domestic hub. Domestic services from KLIA should primarily be for Sabah/Sarawak and for interlining/transfer pax arriving internationally to major destinations in the peninsular.

 

Additionally, the airport is perfect for executive jet travel, VIP movements and for military/police operations. As a major MRO facility - it too is ideal, but what happens when (if) MH moves out would be interesting. The infrastructure is ideal for a third party to move in and take over.

Back to topic:

Yes, TR is finally headed to be under the complete sovereign helm of SIA. This is much needed, although financially it will take time to consolidate... (Bonuses-be-damned?!)

 

I would expect a further Scoot-Tiger consolidation post takeover. Perhaps even a rebranding of the latter into the former. Ultimately, the SIN hub choice will remain número uno given the regional geo-political and economic landscape.. KLIA and Malaysian based carriers stand to lose the most - especially with the lack lustre approach to infrastructure building (KLIA2) and upkeep (KLIA1). Simple remedy for a simple problem yet always over complicated by greedy people with KPI's and deep (but empty) pockets

I agree with every single point you have put forward.

 

BKK and KUL will never be competitive enough for SIN, not for another 50 years. T4 and T5 at Changi are now coming up fast. One of the first few mega airports in Asia, beside Japan and China.

 

SQ made profit of SGD111 million (USD83 million) operating profit for Q1, SGD213.6 (USD152 million) for Q2, currently enjoying strong booking for Q3 and Q4. No doubt another profitable for 2015. Hope they can give a good bonus.....

 

But there are dark clouds as usual:

 

Group revenue for the quarter fell 1.5 percent to Sg$3.84 billion ($2.73 billion) due to tougher competition in the passenger and cargo markets amid a sluggish global economy.

 

"Uncertainty in economic conditions persists, exacerbated by concerns about China's slowing economy which have led to weakening emerging market currencies and volatility in stock markets," SIA said.

"The outlook for both passenger and cargo traffic is cautious. Yields remain under pressure in the face of capacity additions from other airlines," it said.

"Advance passenger bookings for the October-December quarter are positive but mainly bolstered by promotional activities."

SIA is facing stiff competition from Middle Eastern airlines and budget carriers.

During the quarter, SIA carried 4.98 million passengers, slightly higher than 4.89 million a year earlier and filled 83.7 percent of seats, compared with 82.6 percent the year before but yields were lower.

Passenger yield, or money earned from carrying customers per kilometer, fell to 10.4 Singapore cents from 10.9 Singapore cents as more capacity was added, SIA said.

Freight yield fell to 29.9 Singapore cents from 33 Singapore cents despite the airline hauling more cargo during the quarter.

Source: http://www.rappler.com/business/industries/171-aviation-tourism/111859-singapore-airlines-q2-2015-net-income

[Sandeep G 1]

 

Singapore Airlines To Add Düsseldorf To Route Network

 

Flights to Düsseldorf will complement our existing services to Europe, and be served by all-new Airbus A350-900s fitted with Singapore Airlines latest cabin products. With this addition, Singapore Airlines will serve the three largest airports in Germany, including Frankfurt and Munich,

 

Senior Vice President Marketing Planning, Ms Lee Wen Fen

09 November 2015 - Düsseldorf will become the third German city in Singapore Airlines route network next year, when non-stop flights are introduced from Singapore. Flights are to be launched on 21 July 2016 using the all-new Airbus A350-900, which will be the latest addition to the Airlines fleet.

 

Subject to regulatory approval, flight SQ338 will depart Singapore on Mondays, Thursdays and Saturdays at 2330hrs (local time). The return sector, operated as flight SQ337, will depart Düsseldorf on Tuesdays, Fridays and Sundays at 1130hrs (local time). SIA intends to increase frequency at a later date.

 

Flights to Düsseldorf will complement our existing services to Europe, and be served by all-new Airbus A350-900s fitted with Singapore Airlines latest cabin products. With this addition, Singapore Airlines will serve the three largest airports in Germany, including Frankfurt and Munich, said Singapore Airlines Senior Vice President Marketing Planning, Ms Lee Wen Fen.

 

Düsseldorf is the capital of the German state of North Rhine-Westphalia. It is the most populous of the 16 federal states in Germany, bordering Belgium and the Netherlands. In addition to being an international business, manufacturing and financial centre, it is also a leading fashion centre that is well known for trade fairs. With the new flights, Singapore Airlines will serve Germany with 38 weekly services. This includes twice-daily flights between Singapore and Frankfurt, daily flights between Frankfurt and New York, daily flights between Singapore and Munich, and daily flights between Munich and Manchester.

 

Customers will be able to enjoy the Airlines latest-generation cabin products on the new A350-900 aircraft. This includes all-new Business, Premium Economy and Economy class seats, as well as the worlds most advanced in-flight entertainment system. Ticket sales for the new Düsseldorf flights will be made available for sale through our various distribution channels on a progressive basis.

 

Singapore Airlines has 67 A350-900s on firm order, the first of which is due for delivery early in 2016.

 

Flight Schedules

 

SQ338 SIN-DUS MThSa 2330hrs/0630hrs (+1)

 

SQ337 DUS-SIN TuFSu 1130hrs/0610hrs (+1)

 

*all times local, flight schedule is for Northern Summer

 

 

 

Media contacts

If you are a member of the media and want to find out more about us

 

Contact us by email:

Public Affairs Department public_affairs@singaporeair.com.sg

[flee 5]

Singapore Airlines proposed takeover of Tigerair a scene changing strategic move for the SIA Group

 

http://centreforaviation.com/analysis/singapore-airlines-proposed-takeover-of-tigerair-a-scene-changing-strategic-move-for-the-sia-group-252358