Monday, May 30, 2016

Have plans to connect more and more destinations: Scoot COO Leslie Thng

Singapore Airlines (SIA) launched its low-cost arm Scoot in India last week, connecting Chennai and Amritsar to Singapore with its long-to-medium-haul budget carrier. Introducing this service, SIA has become the second-largest airline group to connect maximum number of destinations in the country, next to the national carrier Air India and its subsidiaries. The group also holds 49% stakes in Tata group backed Vistara. From October, Scoot will also commence Singapore-Jaipur services four times a week. Leslie Thng, COO of Scoot and sister airline Tigerair spoke to Shahkar Abidi on the sidelines of the launch, sharing details about the business model, future plans as well as the outlook for the Indian market.

Q. The offshoot model (wherein an airline group has many airlines under its umbrella for different market models) has been a failure in many markets as carriers, in order to take on low-cost competitors, have created their own LCCs. For example, Go Fly, which was founded by British Airways in 1998 for catering to passenger demand in the European market. Initially, the new subsidiary airline was quite a success according to the aviation analysts, only to be later sold to a private equity and then to its competitor easyJet, which merged it with its own operations. Similarly, Air Canada Tango of the parent company Air Canada had to be folded back within four years of rolling its operations in 2001. Recently, closer home, Jet Airways dropped its LCC brand Jet Konnect to focus on developing the full service model across its network. One of the possible reasons for high failure rate has been the brand confusion it creates and the subsidiary, at times, also eats into the parent airline's market. What has made SIA expand its operations based on the offshoot model?

A. We believe that having a set of different airlines in our portfolio works for us. As a group, SIA has taken the efforts to keep the four airlines clear and distinct so that it does not create confusion in the minds of the fliers. Our efforts start with the right branding, to the kind of aircraft we are using and other aspects of the airline business. Parent airline SIA is a premium airline for long haul while SilkAir is for short haul. On the other hand, low-cost carriers Tigerair and Scoot are for short haul and long haul respectively. A committee set up by the SIA group plans and takes decisions so that the resources can be shared among the airlines in the most efficient manner. It is about integration and using the available sources to the fullest. The final objective is to get more for the airlines in the group and make them successful.
30/05/16 Shahkar Abidi/Daily News & Analysis
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