SIA to begin offering Tigerair connecting flights this year

Singapore

SINGAPORE Airlines (SIA) will begin to offer connecting flights onto its budget carrier Tigerair this year now that the low cost carrier has been fully absorbed within the group.

"There are points in the Scoot and Tigerair network where the Singapore Airlines connectivity would be very helpful," said Budget Aviation Holdings (BAH) chief Lee Lik Hsin, who assumed oversight of the newly formed unit some three months ago. Mr Lee formerly headed Tiger Airways. With Tiger delisted and privatised this year, both budget units Tigerair and Scoot are now being operated under a single company.

In the case of Scoot, its newly launched point Amritsar could benefit from SIA's connecting traffic from the US and Australia.

Similarly, Tiger offers unique points in India, China and South-east Asia and passengers could fly from these points to Singapore and connect onto the parent carrier at its Changi Airport hub to fly to medium/long-haul markets such as Australia or the United States. For the SIA as a group, this expands the network opportunities available.

Where cross-selling from SIA onto budget carrier Tiger is concerned, brand dilution could be an issue since SIA has carved out a reputation as a premium airline, one analyst pointed out.

But education will be crucial in ensuring that passengers understand what they're purchasing, Mr Lee highlighted.

"It's letting the customers know that it is two different segments of the journey and it is a very different product they're going to get," said Mr Lee. "When they mix and match in this way, one of the benefits passengers get is the additional value. The entire price of the itinerary becomes more attractive."

Budget carrier Jetstar also has similar arrangements in place with airlines such as Emirates.

Where Scoot and Tigerair are concerned, the aim is to continue to work towards ramping up connecting traffic across the group's long-haul and short-haul budget carriers. At this point, connecting traffic across Scoot and Tigerair remains at just under 5 per cent.

"It's still a small number but obviously it is something that we are working very hard, especially with the new organisation, to improve in a dramatic way," Mr Lee said. A good figure to work towards would be doubling or even tripling that number, he reckons.

In the three months or so since Mr Lee assumed the role of chief executive of BAH, a single head office has been established for the organisation, which streamlines operations by bringing functions - such as commercial - for the two budget carriers under one team.

The next step will be to align all processes in order to extract the full synergies, Mr Lee said, adding that this will take a little bit of time as some of these processes involve external partners.

For instance, plans are in the works for a joint check-in counter for Scoot and Tigerair at Changi Airport, which will allow it to reap cost-savings as it employs a SATS unit to carry out check-in services.

Another area it is working towards is consolidating sales representation in overseas markets, as it makes sense to have the sales team or agents represent both airlines, he added.

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