HK Express boss says long-haul LCCs financially viable

The CEO of Hong Kong budget airline HK Express, Andrew Cowen, says he does not think the fixed assumption that low-cost long-haul-carriers (LCCs) are financially unviable is correct.

His comments come as Singapore-based LCC Scoot began operating its new four-times-weekly Singapore-Athens route earlier this week, using a new B787-8 Dreamliner it received last month. Meanwhile, the UK-based arm of budget carrier Norwegian announced in April it would begin non-stop flights between London and Singapore starting this September.

Speaking to Business Traveller Asia-Pacific, Cowen said: “It is certainly true that the long-haul LCC pioneers have struggled with profitability, but that was true for the short-haul LCC pioneers also, who took some years to refine the LCC business model.

“There are vast numbers of price-sensitive travellers who enjoy travelling on low-fare, short-haul flights and have the desire to travel further, if only they could find lower fares and the ability to shape their journey to suit themselves with the choices LCCs provide.”

In the past, flights exceeding eight hours have tended to be seen as a “no go” area for low-cost models. Scoot’s new Athens service takes 11 hours 30 minutes, while Norwegian’s upcoming Singapore service is expected to take 12 hours and 45 minutes, according to The Independent.

Back in March, Qatar Airways CEO Akbar Al Baker said the threat from low-cost LCCs is short-term, stating: “It doesn’t work. They will not succeed.”

Meanwhile Malaysia Airlines boss, Peter Mellew, said that low-cost LCCs will always be small-scale, and that any increase in the price of oil will cause them difficulty. “It consumes vast amounts of column inches in the newspaper because if people advertise these low fares it makes a big splash, but the economics don’t make sense,” he said in a recent interview with Business Traveller.

Despite this, Cowen says the demand for and strength of LCCs is growing. “Legacy carriers have always downplayed the threat of LCCs, yet FSC (full-service carrier) market share has nonetheless been reducing in favour of LCC market share growth for decades in almost all geographies. I see long-haul LCC as a boon as through interline connection with regional LCCs, offering a far greater choice of low-fare destinations to travellers.”

And while HK Express itself currently does not operate low-cost routes, Cowen isn’t ruling out the possibility, saying that long-haul low-cost flights is “certainly something HK Express is interested in given the huge demand for low fares in the Hong Kong and Pearl River Delta region” – though for the time being the airline is focused on expanding its short-haul fleet and network over the next 18 months.

HK Express is also a founding member of the U-Fly Alliance, which comprises only LCCs. Chinese carrier Lucky Air, a U-Fly Alliance member, currently operates long-haul flights to Moscow – it began a new service on June 12 this year from Kunming that takes 10 hours and 10 minutes. “I have no doubt that more long-haul LCC routes will follow,” said Cowen.

Not all LCCs are as optimistic as HK Express, however. Earlier this week, Malaysian LCC Air Asia X CEO, Tony Fernandes, said that it the airline had decided not to pursue a return of its Europe services – which it cut in 2012 – and its previously targeted expansion to the US mainland.

In a series of tweets, the Air Asia X boss said, “We have decided that ultra-long haul is not relevant now. Won’t get seduced into price wars over London.

“We will stick to the 8 or 9 hours. Our focus will be to Asia with the odd route to Hawaii, which is actually 8 hours from Japan.

“We let the full-service guys fight it out over Europe. Many of them bleeding so much.”

hkexpress.com

Scoot receives new B787-8 Dreamliner configured for long-haul

Scoot Team with first long-haul-configured B787-8 Dreamliner

Budget carrier Scoot is gearing up for its entrance into the low-cost long-haul market, taking delivery of its first B787-8 Dreamliner outfitted for long-haul travel on Friday.

The Singapore-based airline – a subsidiary of the country’s flag carrier Singapore Airlines – is planning to launch its new service to Athens in June and these new B787-8 Dreamliners, of which it expects to receive four this year, are key to its expansion strategy.

It’s important to note that these are not Scoot’s first Dreamliners – in fact, the airline only has Dreamliners in its fleet. These new variations it’s receiving, however, are the only ones equipped with crew bunks, which are necessary for providing crew members with their mandatory rest during long-haul flights.

These bunks do come at the cost of some passenger capacity. The long-haul Dreamliners are equipped for 329 passengers including 18 in its “ScootBiz” section, as opposed to the airline’s regular configuration allowing for 335 passengers with 21 ScootBiz seats.

So far, only Athens has been announced as a new long-haul destination, though a second is expected to be announced later this year.

Speaking at the aircraft handover ceremony in Seattle, Scoot CEO Lee Lik Hsin said, “Our extensive footprint in the region provides us with a good base of connecting traffic to support our long-haul services, and we are excited about the opportunities that we can tap with our expanded fleet.”

Singapore looks set to become a key hub for the rejuvenation of low-cost long-haul flights in the coming months. Budget carrier Norwegian announced in April that it would be launching non-stop long-haul flights between London Gatwick and Singapore starting September 28 this year. That route will be operated by a B787-9 Dreamliner.

flyscoot.com

Scoot and Tigerair to integrate

Scoot

Budget airlines Scoot and Tigerair will begin functioning under a single brand and operating license next year, according to an announcement on Friday (November 4) by Budget Aviation Holdings Pte Ltd. The combination is currently expected to take full effect in the second-half of 2017, after all regulatory, operational and commercial considerations have been addressed.

The integration will include flight scheduling, connections and touch point integration for guests, comprising a single website and common contact centre and check-in counters.

Speaking about the announcement, Goh Choon Phong, CEO of Singapore Airlines and chairman of Budget Aviation Holdings, said: “Scoot and Tigerair have made good progress in their integration since the establishment of Budget Aviation Holdings as a common holding company in May.

“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 license and common brand identity to enable a more seamless travel experience for customers.”

The integration comes as Scoot has been undergoing a number of changes recently, including adding new routes to Jaipur and Hokkaido, in addition to its Athens service next year, while axing existing its service to Hong Kong as part of a process to maximise resources.

flyscoot.com; tigerair.com

Scoot launches services to Jaipur and Hokkaido

Singaporean carrier Scoot has partnered with International Enterprise (IE) Singapore to launch scheduled commercial flights to Jaipur and Hokkaido. The flights to Hokkaido began on October 1, and the new service to Jaipur launched the following day.

The new routes are designed to increase connectivity between Singapore and Japan and India. Government body IE is a key agency involved in promoting international trade and partnering with Singaporean companies in going global.

Both destinations will be serviced by three weekly flights. The service to Jaipur marks the first international connection for the Indian city beyond the Middle East, while Scoot’s flights to Hokkaido mark the prefecture’s second direct connection to Southeast Asia.

Commenting on the partnership, Chua Taik Him, deputy CEO of IE Singapore, said: “Connectivity forms the backbone for a global city like Singapore and is an enabler to drive more trade, business, people, as well as financial, data and service flows. We have been working closely with other Singapore agencies, foreign governments and Singapore companies like Scoot on efforts to establish greater connectivity, including new flight routes.”

To facilitate the new Jaipur, IE engaged state and central governments as well as airport authorities for the final approval of the carrier’s landing rights in the city. The agency also began joint marketing efforts to promote Singapore and Rajasthan as twin destinations. Meanwhile for Hokkaido, the government body engaged the Japanese government to accelerate negotiations between aviation authorities and the airline.

“We are confident that the Scoot travel proposition, combining great value airfares with superior product offerings and a stringent focus on safety, will be particularly attractive to the increasingly affluent Indian consumer,” said Lee Lik Hsin, CEO of Scoot and Tigerair.

The new routes follow plans by the carrier to introduce a new service to Dalian in China beginning October 30 as well as flights to its first European destination, Athens, on June 20, 2017.

Earlier this month, the carrier announced it would be ceasing its service to Hong Kong in order to maximise its resources and expand to more destinations.

flyscoot.com

Scoot to cease Hong Kong services

Scoot

Singaporean carrier Scoot has announced it will cease offering flights to Hong Kong starting from October 30.

According to a statement released by the low-cost carrier, the decision was made to allow Scoot to better maximise its resources and expand its network to more destinations.

The final service to Hong Kong will operate on October 28. TZ322 will depart Singapore at 0155 and arrive in Hong Kong at 0545. The last flight, TZ321, will leave Hong Kong at 0700 and touch down in the Lion City at 1040.

Travellers booked to travel from October 30 onwards will be transferred to the airline’s sister carrier Tigerair, and will be notified via email of the transfer and their options by September 30.

The move follows Scoot’s decision in May this year to reduce the capacity of flights to Hong Kong by deploying B787-8 aircraft, replacing the larger B787-9 that were previously servicing the route.

flyscoot.com

Scoot names its aircraft Kamascootra

Scoot

Singapore Airline’s budget carrier for medium- and long-haul flights, Scoot has reserved the 12th addition to its all-787 fleet, for service to India. The aircraft is named: Kamascootra.

Justifying the name, India chief for Scoot, Bharath Mahadevan says, “We wanted a name with an Indian connect — something that is quirky and funny. We considered naming the plane after superstar Rajnikanth’s name, like Thalaivar or something associated with Sachin Tendulkar, like his jersey number or birth date. Finally we opted for Kamascootra.”

Its 11 other aircraft have been given names such as Barry, Big Yella Fella, Bo-eng, Dream Start, Eight Treasures (from a Chinese translation), Goin’ Scootin’, Inspiring Spirit, Lickity-Split, Maju-lah, Scootalicious, and The Future Is Yellow.

Scoot describes itself as “an airline for the young, the young-at-heart and the value-seeking.”

Kamascootra will inaugurate the Singapore-Jaipur route that will launch on October 2, and will fly on Mondays and Tuesdays.

Flight TZ-506 will leave Singapore at 2035 and arrive at Jaipur at 2330. Return flight TZ-505 will depart from Jaipur at 0040 and land in Singapore at 0845.

Mahadevan adds, ”The Singapore Airline Group will offer extremely affordable fares from Jaipur to Singapore, and other destinations like Melbourne, Sydney, Hong Kong and Bangkok. The fares will range from ₹4,699, which is by far the most affordable in the market for the economy class. The sale period is from September 1-11.”

Scoot started operations to India from May 2016, with flights to Chennai and Amritsar.

flyscoot.com

Scoot names Athens as its first European destination

Scoot will launch the world’s longest low-cost carrier service next year when it begins operating flights between Singapore and Athens.

According to Scoot, the commencement of its service into Europe is part of the Singapore Airlines Group’s strategy “to stimulate passenger traffic between Asia Pacific and Europe, as well as to boost connectivity through the Singapore hub.”

The Singapore–Athens route, which covers a distance of over 10,000km, is scheduled to begin on June 20, 2017. The flight schedule can be found below:

Singapore–Athens

Flight no.DepartureArrivalFrequency
TZ70202000830Tue, Thu, Sat, Sun

Athens–Singapore

Flight no.DepartureArrival

Frequency

TZ70112000425 (+1)

Tue, Thu, Sat, Sun

Flights will be operated by the B787-8, which features a two-class configuration that includes 21 in business and 314 in economy.

While Scoot will be offering a low-cost product offering on the route, customers looking for an upgraded experience can choose from a number of chargeable add-ons such as meals and streamed in-flight entertainment.

The Singapore low-cost carrier does offer a premium cabin class called ScootBiz, which grants passengers all of the amenities mentioned above, as well as an all-leather seat with 38-inch seat pitch and 30kg of checked baggage.

To commemorate the launch of its first European service, Scoot is offering one-way economy fares starting at S$288 (US$215), inclusive of taxes. The promotional fare for ScootBiz starts at S$888 (US$661). Deal ends on August 31, 2016.

For more information, visit flyscoot.com

Clement Huang