Singapore Airlines “Budget Aviation Holdings” confirmed at the end of the week that it would merge SIA low cost subsidiary Tigerair with long-haul hybrid carrier, Scoot. Scoot will be the sole branding for SIA low cost activities.
Budget Aviation Holdings (BAH), the parent of Singapore Airlines (SIA) two low cost brands Scoot and Tigerair, will merge both carriers in the middle of next year. The merged unit will operate under Scoot’s brand.
The integration is expected to be realized between mid and end 2017, given the full spectrum of commercial, operational and regulatory considerations. This will encompass flight scheduling and connections, as well as touch point integration for guests including a common website, contact centre and check-in counters.
“Scoot and Tigerair have made good progress in their integration since the establishment of Budget Aviation Holdings as a common holding company in May,” said Singapore Airlines CEO and Budget Aviation Holdings Chairman, r Goh Choon Phong.
“The integration has already led to commercial and operational synergies between Scoot and Tigerair that are providing growth opportunities for both airlines, an example being Scoot’s plan to launch its first European service, to Athens, next year. Following a review, we have determined that the logical next step is to pursue a common operating licence and common brand identity to enable a more seamless travel experience for customers.”
Commenting on the merger to local media, BAH CEO, Lee Lik Hsin, said Tigerair’s business will benefit from the strength of Scoot’s brand for the next phase of its growth.
Singapore Airlines acquired in 2014 all the shares of Tigerair and delisted it consequently. At the same time, both carriers started coordinating their schedule and transfer traffic.
Tigerair serves 40 destinations in twelve countries with its fleet of 24 A320 Family jets. Scoot has six B787-8s and six -9s serving a network of 24 destinations in ten countries.
There is little chance that subsidiaries of Tigerair outside Singapore will survive. Tigerair Australia is now a wholly owned subsidiary of Virgin Australia. brand. Tigerair Taiwan, created two years ago, never managed to make money since its creation. The carrier will reduce its network next January by stopping to fly to Kota Kinabalu in Malaysia and Singapore. Only Bangkok and Chiang Mai will remain in ASEAN. However, a decision over the future of the airline will be taken by main shareholder China Airlines by the end of the year.
Parent company Singapore Airlines is also facing difficulties. Singapore national carrier last week posted a 70% year-on-year second quarter net profit decline, to US$47 million), as demand and yields slumped amid fierce competition. For the first six months of its financial year, SIA’s passenger revenues slipped 6.4%, with yields falling 2.9% and load factor declining 1.9%.