Airfares this summer travel season show indications of a slide as compared with last year, when the lifting of COVID-19 travel restrictions after a gap of two years led to a massive booking surge from passengers, but remain higher than pre-pandemic levels, said CEO of Scoot, Leslie Thng.
The budget arm of Singapore International Airlines has reached comparable levels of capacity for the Indian market with 43 weekly flights, and has “recovered beyond” 2019 levels across its global network, Mr. Thng told journalists at a press meet.
After reporting record profit in 2022-2023 (S$43.5 million) after four years of losses, and continuing to clock profit in the first three quarters of financial year 2024, the airline expects to maintain the trend though “the operational environment is more challenging as competitors have put more capacity,” the airline’s CEO said. This has also resulted in “the softening of yields”. which are lower than 2023 levels but remain higher than 2019 levels, he explained. Yields in the aviation sector refer to revenue per passenger per kilometre.
The Scoot CEO was speaking on the occasion of the launch of its inaugural Embraer E190 - E2 flights from Singapore to Krabi and Hat Yai. The airline has taken delivery of two of these aircraft from the Brazilian aerospace manufacturer out of the total nine it has ordered, which will all be added to its fleet by the end of 2025. The planes would be deployed to connect a total of six destinations, of which Koh Samui and Sibu are new to Scoot’s network while others would see increased frequencies.
“The aircraft will also help shorten connecting times at our hub at Changi airport,” Mr. Thng noted, explaining the rationale for adding the 112-seater aircraft, which is a new addition to its existing fleet of Airbus A320 Neos and Boeing 787s. The more diverse an airline’s aircraft fleet, the more complicated its flight operations and crew requirement get resulting in a higher cost of operations.
The Brazilian aerospace manufacturer has also been trying to strengthen its foothold in the Indian aviation market, where Air India and IndiGo have set global records with their aircraft orders but the Bengaluru-headquartered Star Air remains the sole buyer for its regional commercial jets with a total six in its fleet.
The Indian government’s decision to remove the 600-km radius cut-off limit for awarding airlines subsidies for flights under the UDAN or regional connectivity scheme now presented an opportunity for its jets, Raul Villaron, Vice President for Sales and Marketing and Head of Asia and Pacific for Embraer Commercial Aviation, told The Hindu. The Embraer planes could be attractive for carriers such as IndiGo, which have a wide gap to fill between 70-seater ATRs as well as the newer A321 neo planes with a capacity of up to 200 seats it is now adding to its fleet, he observed.
Asked about possible synergies in the planning of route networks and flight operations between Singapore Airlines (SIA) Group and Air India, in which Scoot’s parent would hold a 25.1% stake after Vistara is merged into it, Mr. Thng said it was too “premature” to comment as the regulatory clearances for the integration were still underway.
(The writer was in Singapore at the invitation of Scoot)
