My “budget” experiences on Scoot and Jetstar Asia

I flew from Singapore to Hainan, arriving in Haikou on Scoot and returning from Sanya to Singapore on Jetstar Asia. I thought I might try both airlines and see the difference.

I was all prepared for the “budget” experience – the add-ons and the no-nos, the expected lack of service and whatever that which was provided perhaps not as refined as you would expect on the better legacy airlines, less comfort because of the smaller seat pitch, and the unsavoury tales told by some travellers.

But, really, for a short flight and for the absence of choice, I became convinced I could ride it out. And so I did. Overall, the flights were comfortable enough. But I couldn’t help but observe a common challenge faced by the crew on both flights: How to manage passengers’ behaviour when it becomes necessary.

Courtesy Scoot

Scoot

There was a big tour group on board. They were not unruly but gathering along the aisle most of the time during the flight. Although they were passing around bags of food which they had brought from the ground, the crew ignored it. Yet when a single traveller outside the group stole a bite of a cookie, a flight attendant told him it was not allowed while the others were still chewing on their “ham chim peng” (fried Chinese doughnut). Most people will put up with the rules so long as their implementation is not discriminatory. The incident gave the impression it might be easier to pick on a single traveller than a group of them!

As the flight landed at Haikou Meilan Airport, the same group of travellers stood up to retrieve their bags from the overhead compartments, and were milling along the aisle. While still taxiing and waiting to dock, I could hear the flight attendant who was seated at the back screaming repeatedly, “Please sit down!” She was literally shouting till her voice hoarse, and I lost count of the number of times she did it. However, the travellers ignored her instruction all the way to the parking bay.

Courtesy Jetstar

Jetstar

The same problem of passengers standing up and retrieving their bags as soon as the aircraft touched down was encountered. It was a lighter flight, so the problem was more manageable. The flight attendant immediately stepped down the aisle and told the standing passengers to return to their seats. Problem solved.

To be fair, this is not a problem faced only by budget carriers. It happens often too on legacy airlines. Most time, it was a problem of ignorance. It was however interesting observing how the crew on both the said Scoot and Jetstar flights handled the situation.

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Why SilkAir’s merger with SIA is long overdue

https://www.todayonline.com/singapore-0/why-silkairs-merger-sia-long-overdue

Singapore Airlines and Scoot do well, but Silkair lags behind

Courtesy AFP

Singapore Airlines (SIA) posted full-year operating profit ending March 2018 of S$703 million (US$523 million), an increase of more than 80 per cent from last year’s S$386 million, favoured by improved passenger carriage and load factor. The airline attributes its success to early fruits of a three-year transformation programme that incorporates a new revenue management system, new airfare pricing structure and the set-up of a centralised pricing unit, and other initiatives to save fuel and reduce waste.

Budget subsidiary Scoot also showed improved profitability but at a lower but commendable rate, increasing by almost 15 per cent from last year’s S$67 million to S$77 million.

However, regional carrier SilkAir suffered a decline of 57 per cent as its operating profit plunged from S$101 million to S$43 million.

As a group (which includes SIA Cargo and SIA Engineering), the company’s operating profit surpassed S$1 billion, yielding a net profit of S$893 million, which is 183 per cent more than last year’s S$533 million – its highest since 2011. This came on the back of traffic growth higher than the decline in yield, and improved cargo and engineering revenue. Also notable is the impairment of the Tigerair brand and trademarks, and a fuel hedging gain compared to a loss last year.

The outlook looks positive with strong advance passenger bookings, but of course there are the usual caveats of competition and the volatility of fuel prices which are beginning to trend upward.

More interesting is how, following the announcement, SIA confirmed the rumour of an impending merge between SilkAir and the parent airline. The latest performance results only serve to make sense of the initiative for SilkAir to go the way of Tigerair in yet another step towards rationalizing the Group’s operations. This is no surprise (see After the merger of Scoot and Tigerair, will it be Singapore Airlines and SilkAir next? Aug 29, 2017).

Singapore Airlines does better without Tigerair

Courtesy Singapore Airlines

Singapore Airlines (SIA) reported 3Q (Oct-Dec 2017) operating profit of S$155 million (US$118 million), an increase of S$4 million or 2.6 per cent year-on-year. This adds up to a nine-month total of S$566 million compared to S$427 of the previous year, an increase of S$139 million or 32.6 per cent.

SIA can look forward a strong recovery for the full year, as the amount already exceeds last year’s S$386 million, which declined by S$99 million or 20.4 per cent.

Subsidiaries SilkAir and Scoot faced different fortune. Regional carrier SilkAir suffered a dip in operating profit of S$11 million or 36.7 per cent from S$30 million to S$19 million despite an increase in revenue and passenger carriage. Budget carrier Scoot on the other hand reported operating profit of S$43 million, an increase of S$25 million or 48.3 per cent, overtaking its sibling airline.

Courtesy Scoot

As a group (including SIA Cargo and SIA Engineering), 3Q operating profit was S$330 million – an increase of S$37 million or 12.6 per cent – in the absence of Tigerair, which incurred a S$79 million writedown of the its brand a year ago. This adds up to S$843 million for the nine months to December 2017, an increase of S$248 million or 41.7 per cent.

A challenge ahead would be rising fuel cost, which rose by S$86 million or 9.2 per cent in 3Q, fortunately cushioned by gains in hedging. SIA and SilkAir will face pressure on yields from more aggressive competition while Scoot without Tigerair may find opportunities in the low-cost trend for the longer haul and its appeal to millenials.

A Brief History of Singapore Airlines Going Forward

Courtesy Bloomberg

The history of Singapore Airlines (SIA) dates back to the incorporation of Malayan Airways on May 1, 1947. The airline changed its name to Malaysia Airways in line with the formation of Malaysia in 1963. The entity splits into SIA and Malaysian Airlines System in 1972, seven years after Singapore left the Malaysian federation and became a nation in its own right. Then on SIA expanded quickly and became one of the world’s top airlines.

SIA established Tradewinds in 1975 as a regional carrier catering mainly to the leisure market. This was SilkAir’s predecessor as the airline looked beyond into the business segment and assumed its new identity in 1976. With the growth of budget travel, SIA partnered leading budget carrier Ryanair to set up Tiger Airways which commenced services in September 2004. Tiger underwent several changes over the years, performing below expectations. In the meantime SIA set up Scoot, a fully-owned budget subsidiary said to be targeting the medium (and now long-haul) while Tiger focused on the short-haul. The line soon blurred, and by the end of 2016, Tiger was assimilated into Scoot.

As SIA expanded as it grew, so did it reconsolidate by contracting as the aviation landscape shifted. The demise of Tiger was imminent when Scoot was formed, not only to extend the range of the budget operations but also to recapture ground lost by Tiger. The intra-competition that followed did not make much sense. The costly lesson from Tiger is that it can be hard to repair a badly tarnished image and easier to start a new slate.

Now, from four down to three, will there be further restructuring of the SIA stable?

Courtesy AFP

According to OAG, an air travel intelligence agency based in the UK, Scoot has overtaken SilkAir in the number of seats offered. The budget airline is also about a third as big as SIA in the economy market. And it is growing at a faster rate than its regional sibling. Besides, parent SIA looks set to refocus on premium travel, a move that some analysts believe to favour the expansion of Scoot, particularly when the line between budget and legacy airlines begins to blur across the industry.

This does not augur well for a carrier like SilkAir operating in the middle of the field. Since its inception, the so-called regional carrier has been operating in the shadow of the parent airline and continues to do so despite recent efforts to change that image. Does this forebode a merger between SilkAir and Scoot, going forward, although the former has time and again insisted it is not a budget airline? Can Scoot on the other hand be more than a budget carrier?

What’s in a name anyway? So says the Bard, a rose by any other name would smell as sweet.

After the merger of Scoot and Tigerair, will it be Singapore Airlines and SilkAir next?

Courtesy Wikimedia Commons

Will Singapore Airlines (SIA) and its subsidiary SilkAir take the merger route of Scoot and Tigerair, now that their finance operations are merged, perhaps as a first step in that direction?

While SIA maintains that such initiatives are part of an ongoing programme to be more competitive, the speculation is only to be expected in the oontext of the company embarking on “a comprehensive review that leaves no stone unturned, cutting across all divisions of the company” as stated by its CEO Goh Choon Phong.

SlkAir started in 1975 as Tradewinds Charters which became Tradewinds Airlines in 1989 when scheduled services were introduced. Three years later, it was renamed SilkAir, shedding its leisure image and is often referenced as SIA’s regional arm.

However, in its long history, SilkAir hardly comes into its own, seen as operating in the shadow of parent SIA. Therefore, consolidating operations – finance, for a start – makes sense since some of the routes operated by SilkAir were previously operated by SIA and in light of SIA re-focussing its operations in the region. Besides, as the competition intensifies, a strong SIA brand across the region is imperative. There is no reason why a regional carrier so-called should be viewed as one providing services one notch below, an unfortunate perception that is difficult to shed.

At the height of the budget travel boom in the region, SIA launched Tigerair in 2003. Then there were already questions asked about the continuing operations of SilkAir which the company reiterated is a regional airline and not a budget carrier. Then Scoot came into being in 2012 as a medium haul budget carrier, differentiated from Tigerair’s short haul operations. It soon became clear the SIA Group was having one too many on its plate, resulting in intra-competition. Tigerair and Scoot finally merged under the Scoot brand this year.

Now that the number has been trimmed from four to three, will it be cut down further to two, typically the structure of most global airlines, between full-service and low-cost operations?

SilkAir may be likened to Cathay Dragonair, which Cathay Pacific has also insisted is not a budget but regional airline. But then, Cathay has never believed in adding a budget carrier under its wings. You might say that place is filled by Dragonair. By comparison, however, SilkAir’s status is somewhat ambiguous depending on how SIA delineates the geography as being regional or international.

Joon: Basic yet chic

Courtesy Air France

What’s basic yet chic? That, says Air France, is the design of the uniform for cabin crew of its new subsidiary airline, Joon. You can expect to serve flight attendants in trendy casuals that include blazers, polos, ankle pants and sneakers. Apparently it is Silicon Valley inspired.

A statement issued by Air France said: “Its visual identity is based on an electric blue colour code symbolizing the airline’s dynamic attitude, as well as the sky, space and travel.”

Believe it, the colour has much to do with the kind of image projected by the airlines. Targeting millennials, Joon moves away from the convention of a neutral and sedate hue for something more in line with the outgoing disposition of younger jet-setters.

Many years ago when Singapore Airlines (SIA) launched a regional carrier called Tradewinds, there was much ado about the crew uniform to project the more casual mood of leisure travel – something you might wear on a vacation. That changed when its successor SilkAir took over to target business travel and other more serious travellers as well.

Courtesy Scoot

But it is Joon that is going completely millennial, right down to white trainers.

Courtesy Air Canada

Meantime, Air Canada is going retro. Its maple leaf logo design returns to the airline’s look 24 years ago, incorporating the circle loop. Black replaces red in the letterings on the aircraft, and flight attendantswill match with black uniform highlighted with a red tie or scarf.

Looks like you either go hip or nostalgic if you want to make a statement.