Scoot to launch five new destinations next year

Athens

AS its maiden long-haul flight between the Asia-Pacific region and Europe took off on Tuesday, budget carrier Scoot unveiled its ambitious plans to add five new destinations in the next year.

Following its Singapore-Athens debut flight, Scoot is planning to fly four new short to mid-haul routes and another long-haul route.

Scoot chief executive Lee Lik Hsin did not reveal the destinations at a press conference in Athens on Tuesday, saying they will be announced on July 25, which is when Scoot and Tigerair will operate under the Scoot brand after the finalisation of the merger of the two airlines under one air operator certificate.

Mr Lee said that the five new destinations will "open up new travel options for Asian travellers as well as European ones now with the start of our Singapore-Athens service".

Following the merger, Scoot's flight designator code will be changed from TZ to TR, the code currently used for Tigerair flights. The two airlines will be under one holding company - Budget Aviation Holdings, which made S$67 million in operating profit for the fiscal year between 2016 and 2017.

Plans for Scoot's second long-haul destination were first revealed last month. The budget carrier said that it was looking to add the Honolulu route by year-end. This came after it submitted an application to the US Department of Transportation to operate flights to the Hawaiian city via Osaka in Japan.

On choosing Athens as Scoot's first European destination, Mr Lee said: "We thought it'll be better to look for an untapped market. There are currently no flights between Southeast Asia and Athens so we saw the opportunity."

The Singapore-Athens route on Tuesday was operated on Scoot's newest Dreamliner which arrived in Singapore in May this year and is fitted with cabin crew bunks that are required for flights lasting about 12 hours and more.

The airline has 14 Boeing 787s in its fleet and has six more on order.

The 11.5-hour direct flight to Athens takes off from Singapore every Tuesday, Thursday, Saturday and Sunday. Scoot is the only airline and low-cost carrier offering direct flights between South-east Asia and Greece.

The four-weekly flights will be reduced to twice weekly during the winter season and this means that some of the aircraft will be redeployed elsewhere. Mr Lee said that Scoot has plans to find other services in the winter period where it can redeploy the aircraft such as Chitose in Hokkaido, Japan.

According to Mr Lee, the load factors to Athens have been around 70 per cent for the summer months.

Singapore Airlines (SIA), Scoot's parent company, last operated a year-round service to Athens in 2011 but that has since come to a halt.

On Sunday, AirAsia CEO Tony Fernandes said on his Twitter account that AirAsia X, the long-haul arm of the airline, will cut off flights to Europe and California soon and will instead focus on Asia.

Despite intense competition facing Scoot, Mr Lee doesn't see a need for the airline to ramp up its long-haul loyalty programmes.

"The basic budget business model that we employed to this point has worked well for us and it doesn't include additional things like loyalty programmes. By and large, what we have seen is most of our customers don't feel they need this component," he said.

In the event of higher fuel prices, Mr Lee said that ticket prices may or may not be affected. "Ticket prices move in response to many factors, not just fuel price. Ultimately, the prices are generally more related to demand rather than supply factors so whatever fuel prices are, we can't raise prices if customers aren't willing to pay," he said.

Centre For Aviation analyst Brendan Sobie said in an earlier report that SIA "strategically needs Scoot to operate several routes to Europe in order for the group to resume growth in the key European market and to respond to intensifying competition, including from new long-haul, low-cost players".

Mr Sobie added that Scoot should consider London and Berlin as potential new routes.

SIA closed trading at S$9.97 on Tuesday, down two Singapore cents, or 0.2 per cent.