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flee

Tigerair to be Dissolved, Merged into Scoot

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SIA CEO Goh Choon Phong, who is also the Chairman of Budget Aviation Holdings, says the move will help to fully realise commercial and operational synergies between the two budget airlines.

 

SINGAPORE: National carrier Singapore Airlines (SIA) has set up a holding company to own and manage two of its budget airlines Scoot and Tiger Airways, it announced on Wednesday (May 18).
Budget Aviation Holdings will be helmed by Mr Lee Lik Hsin, who has led Tigerair since May 2014. Scoot CEO Campbell Wilson is set to return to SIA in a senior position, the airline said.
SIA CEO Goh Choon Phong will be Chairman of Budget Aviation Holdings and its management will include senior staff from Scoot, Tigerair and SIA.
Full report:

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SIA should have just merged Tiger into Scoot for better efficiency as it may likely have to do so in near future; instead of having 2 budget subsidiaries.

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SIA should have just merged Tiger into Scoot for better efficiency as it may likely have to do so in near future; instead of having 2 budget subsidiaries.

 

Yep, but they know well that the Tigerair brand is not doing very well. Tiger Airways Australia was involved in a suspension by the Civil Aviation Safety Authority (CASA) in Australia and now completely sold off to another owner in Australia. I assume they don't want to use this brand for their long haul budget carrier, then Scoot was born.

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I think the holding company is an interim measure to consolidate the two LCCs. It is also interesting to note that the CEO will be the Tigerair CEO. Tigerair has more complex business and shareholder relationships while Scoot is a relatively clean 100% SQ subsidiary.

 

Later on, as the two carriers develop, a decision may be made as to whether they should merge. Its a bit like Airasia X's relationship with Airasia. It now looks like they are merging in their operations to reduce cost. Having both Scoot and Tigerair share common infrastructure and management costs would help to keep costs down.

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Scoot-Tigerair merger moves one step closer with a new Singapore Airlines Group LCC holding company

 

Singapore Airlines (SIA) has moved one step closer to merging short haul LCC Tigerair and medium/long haul LCC Scoot by creating a new holding company for its two budget airline subsidiaries. Scoot and Tigerair will remain separate airlines for now, with their own operator certificates, but will have a new joint management team led by the Tigerair CEO, Lee Lik Hsin.
The establishment of Budget Aviation Holdings facilitates further integration and will unlock more synergies, particularly on the cost side, as overlapping functions are eliminated. The outlook for Tigerair and Scoot, both of which are now profitable, further brightens as the two integrate but there are still challenges to overcome – including potential overcapacity.
A merger is likely to eventuate but is difficult to implement at this juncture. The anticipated rebranding of Tigerair Australia by Virgin Australia and Tigerair Taiwan by China Airlines should make it easier for the SIA Group to transition to a single LCC brand, with Scoot the likely surviving brand.
SIA's new holding company results in combined management team for Scoot and Tigerair
On 18-May-2016 the SIA Group announced the creation of a new holding company for Scoot and Tigerair. The group stated that the new structure will allow the two airlines to integrate and share functions such as sales, marketing, IT, planning and operations.
Lee Lik Hsin has been appointed as CEO of Budget Aviation Holdings and Leslie Thng has been appointed as the chief commercial officer. Mr Lee and Mr Thng are long-standing SIA Group executives, Mr Lee having been seconded to Tigerair as CEO for the last two years, and Mr Thng having served the last four years as chief executive (CE) of the SIA full service regional subsidiary SilkAir.
Scoot commenced operations in Jun-2012 as an independent fully owned subsidiary. The group stated that Campbell Wilson, who was seconded from SIA to Scoot and has served as Scoot’s CEO since the start of the pre-launch phase, will return to the parent airline as acting senior vice president sales and marketing.
Full analysis here:
Edited by flee

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This is not unexpected, took them long enough to realise the synergy they can create by combining the two entities. Singapore Airlines Group is sharpening their tools by using multi-pronged strategies to battle AirAsia Group, Lion Air Group and Vietjet Air. Not much they can do with SQ mainline service, which continues to battle ME3 and Turkish Airlines.

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Didn't take them "long enough" there were ownership issues that previously hampered a merger or single-entity management structure.

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Tigerair to come under Scoot brand name

 

SINGAPORE: By the end of next year, the Tigerair brand will cease to exist. Instead, it will come under Scoot – its sister budget airline under the Singapore Airlines (SIA) Group.
The integration is expected to happen between mid and end of 2017. The two carriers will also operate under a single licence by the end of next year, Budget Aviation Holdings, which owns and manages both airlines, said on Friday (Nov 4).

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This article mentions the following: http://www.channelnewsasia.com/news/business/integration-of-scoot-tigerair-to-strengthen-sia-s-position-ceo/3261258.html

"The national carrier also plans to add 12 new destinations this financial year"

 

Wow, 12 destinations!

I highly doubt all 12 will be served by SQ alone. They barely added that many destinations in the past decade.

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