Scoot and Tigerair go where it makes sense

ScootTigerSingapore Airlines (SIA)’s decision to bring its budget subsidiaries Tigerair and Scoot under the control of a common holding company – Budget Aviation Holdings – is no surprise. Expected and long predicted. It just didn’t make sense for the two carriers to be competing for the same market in apparent collaboration although the initial division is for one to operate the short haul and the other the medium haul. The lines soon blurred.

The new entity will be headed by Tigerair CEO Lee Lik Hsin.

SIA chief executive Goh Choon Phong said: “The holding company structure will drive a deep integration of our low-cost subsidiaries, which are important parts of our portfolio strategy in which we have investments in both the full-service and budget aspects of the airline business.”

Indeed, as the aviation landscape keeps shifting, one may even wonder why this has not happened much earlier with Tigerair’s poor performance and Scoot competing in the same market. While major airlines are consolidating their strengths, SIA may be finding it one too many on its plate to try and catch-all but risks dilution of its core strategy. Well, as it has always been said, better late than never, and better now than later.

This may be the prelude to the merger of the two carriers with one identity although SIA has said there may be difficulties with traffic rights, airline/aircraft registration and licensing. But it can happen. “We would not rule it out,” said Mr Goh. “But for the moment, we do see a benefit in them having their own separate identities.”

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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