Travel

Here’s Why Singaporeans Should Rejoice About the Scoot-Tigerair Integration

Peter Lin 0 Comments

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Is the end of Brangelina still a thing? It’s been almost a month since we received news that Angelina Jolie was filing for divorce from Brad Pitt, ending a 12-year relationship that most thought would last forever.

But if news of their breakup is still affecting you, here’s another “marriage” that should give you reason to rejoice – the ongoing integration between budget airlines Scoot and Tigerair. Both Singapore Airlines subsidiaries were brought together under one holding company back in May. Here’s why this integration, which looks headed towards merger, is only going to be good news for us Singaporeans.

 

1. Integration means reduced costs

The obvious benefit of integration is that it now makes more sense for both airlines to leverage on economies of scale. For example, it wouldn’t have been practical in the past for either Scoot or Tigerair to even consider hiring interns on a large scale, but that’s one of the first things that the holding company which operates both carriers did.

Last month, the very creatively-named Budget Aviation Holdings announced that they had tied up with the Institute of Technical Education to build a new cabin training facility for ITE students to learn inflight service skills. The facility will be ready next year and will play a part in creating opportunities for these students to join the cabin crews of both airlines as interns, and possibly begin their careers.

Integration means that both airlines will share a training curriculum, as well as ensuring both interns and staff can be deployed on flights from both carriers. This can only mean reduced costs for Tigerair and Scoot moving forward.

If that example’s not convincing enough, then consider this – the CEO of Budget Aviation Holdings is Mr Lee Lik Hsin, the Tigerair CEO. Scoot’s founding CEO Campbell Wilson will soon return to SIA in a senior position. That’s technically one less CEO salary to count towards the holding company’s expenditure.

 

2. Reduced costs should mean lower prices

While it may seem like it would be beneficial to the two airlines to enjoy these cost savings, there is greater benefit in passing on these cost benefits to us, the customers. In fact, the key to the very competitive budget airlines industry in the region is keeping prices low.

Scoot and Tigerair are not strangers to low prices, of course (and I’m not just talking about Scoot’s ticket prices that conveniently don’t include taxes). When asked he was concerned about fares for full-service airlines becoming more affordable due to lower fuel costs, CEO Lee isn’t worried. He is convinced that Scoot and Tigerair are capable of being even more affordable. Which, admittedly, is like Joseph Schooling not needing to worry about his Olympic record being overtaken by a mandarin orange.

But it’s telling when, on Scoot’s new route between Singapore and Sapporo, Hokkaido via Taipei, their fares are no more than $250 for a return trip. Which is pretty crazy, considering it would normally cost at least $800.

 

3. Integration allows for network expansion

Scoot currently has only one flight to Hong Kong. Tigerair has three. CEO Lee openly admitted to Channel NewsAsia that the single Scoot flight was struggling. It’s not surprising, therefore, that the announcement that Scoot was ceasing services to Hong Kong came shortly after. Instead, Tigerair will soon have four flights to Hong Kong. Presumably, in time to come, Tigerair will also take over most of Scoot’s closer destinations, like Bangkok’s Don Mueang.

This gives Scoot the opportunity to expand its network to more unique destinations, in line with their dream of being a long-haul budget airline, and connecting passengers between Europe and South-East Asia. Already, it has plans to fly to Athens, with fares as low as $600.

 

4. Consolidating itineraries with other alliance partners

But perhaps the biggest value-add of the integration of Scoot and Tigerair has been that they are now a part of the world’s largest low cost carrier alliance. Known as the Value Alliance, it brings together eight regional budget airlines including the Philippines’ Cebu Pacific, South Korea’s Jeju Air and Thailand’s Nok Air.

Value Alliance allows customers to book flights from any of the carriers in a single transaction. This also means they can choose meals, handle baggage requests in a single itinerary. Just in case I need to be clearer about this, customers can now reach more than 160 destinations across the Asia-Pacific region conveniently.

Looking for an adventure in the Philippines? You can now fly from Singapore via Tigerair to Manila, then from there take a Cebu Pacific flight to just about any city in the country, in the same transaction.

 

What other benefits are you looking forward to in this Scoot-Tigerair integration? Let us know.

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

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