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.

Airlines target millennials with lifestyle branding

http://www.todayonline.com/commentary/airlines-target-millennials-lifestyle-branding

What would make the new Scoot different?

Singapore Airlines (SIA)’s budget subsidiaires Scoot and Tigerair are now fully merged under one name, i.e. Scoot. Tigerair operated its last flight on July 24.

Why Scoot and not Tigerair? Quite obviously, considering the dotted history of the latter’s operations that ran the gamut of bad publicity from complaints about poor service and flight disruptions to safety infringement that resulted in suspension of its Australian services in 2011.

Adopting the Scoot brand could help distance the new identity from a beleaguered past. Tigerair remained a broken dream for its parent who had named it with the nostalgia of an erstwhile era before SIA broke away from Malaysia-Singapore Airlines to come into its own. Then the airlines was flying the Tiger logo.

Courtesy Scoot

The Scoot/Tigerair merger is marked with a new tagline: Escape the Ordinary. Though not one quite stunning or provocative for a tagline, it is perhaps an ambitious but staid attempt to set itself apart from the pack. Scoot’s original tagline was the somewhat outlandish “Get Outta Here!”

Yet what would make the new Scoot different?

Scoot CEO Lee Lik Hsin said of its new tagline: “It is inspirational to our inner wanderlust, and inspires us to travel and explore the world.”

Given that any and all of the airlines, whether full-service or no-frills, are but a means of transportation, how then will Scoot inspire people to travel with them instead of others? That’s the challenge.

And then there are three

From four to three (if you exclude SIA Cargo which will be absorbed as a division of the parent airline in 2018), Singapore Airlines (SIA) will now have three carriers in its stable as sister budget subsidiaries Scoot and Tigerair announced the completion of their merger come July 25, 2017. SilkAir, defined as a regional carrier, makes up the trio.

Both Scoot and Tigerair will henceforth operate under the Scoot brand. It seems logical, considering the poor reputation of Tigerair and the plans to expand Scoot into the long-haul. Unlike Tigerair, Scoot was launched as a medium-haul budget carrier.

The merger was long anticipated as the operations of the two carriers began to overlap with Scoot operating the short-haul as well. At the same time, loss-making Tigerair’s days were numbered as it struggled through a period of difficult times both financially and operationally, scarred with customer complaints of poor service.

While it certainly makes sense for the two carriers to eliminate intra-competition and pool their resources, it also opens the field for Scoot to expand its network. Already it is trailing behind Malaysian budget carrier AirAsia, whose chief Tony Fernandes is known to be testing new boundaries beyond the four-to-five hour limitation of the budget model. While AirAsia is not always guaranteed success, it has enjoyed headstart advantages.

Courtesy AirAsia

Scoot has announced a service to Honolulu by the end of the year, six months after AirAsia launches its service from Kuala Lumpur. Both carriers will operate via Osaka. It will be interesting to see how the competition plays out.

Scoot may be advantaged by its hub connections at Changi Airport while AirAsia will rely on its wide regional network to take advantage of Kuala Lumpur International Airport’s lower costs in a price-sensitive leisure market.

Scoot will benefit from the reputation of the SIA brand association, but somehow that has not rubbed off on the beleaguered Tigerair.

The competition is set to redefine the budget game as Scoot and AirAsia battle it out to be the region’s leading carrier not only for the short-haul but also beyond.

Singapore Airlines’ profit plunges

Courtesy The Straits Times

Courtesy The Straits Times

THE downward trend was to be expected as you followed Singapore Airlines (SIA)’s performance month-to-month for the second quarter (July-September) of its current financial year. The sluggish global economy, according to the airline, was largely to blame.

SIA’s operating profit declined 19.4% from last year’s S$98m (US$71m) to S$79m. Fortunately, the stronger first quarter boosted the result for the first half-year, with operating profit increasing 34.0% from S$206m to S$276m on declining revenue of S$343m and the contraction in passenger carriage by 3.2%. Yield as a consequence came down by 2.9%, and the passenger load factor of 78.1% was a drop of 1.9 percentage points. The saving grace was lower fuel costs by 25.2%.

Regional subsidiary SilkAir too suffered a decline in operating profit for Q2, down 19.0% from S$21m to S$17m.

Budget subsidiaries Scoot and Tigerair however managed to reverse their losses, respectively from a loss of S$2m to S$5m and from a loss of S$10m to S$3m.

Looking ahead, SIA hopes that the improved operating capability and efficiency of its growing Airbus A350 fleet as well as the long anticipated integration of Scoot and Tigerair (see The end draws near fro Tigerair, Nov 6, 2016) would improve its fortune as it continues to be impacted by geopolitical uncertainty and weak global economic conditions and faces the prospect of losing the cushion by lower fuel costs as oil producers cut back on their output.

However, if there’s any consolation, close rival Cathay Pacific too is experiencing a downward trend in profitability (see Cathay Pacific losing grip of China card, September 19, 2016 ).

The end draws near for Tigerair

ScootTigerThe announced assimilation of Tigerair into Scoot by the end of next year does not come as a surprise. In fact, it has long been anticipated.

The two airlines will operate under the single identity of Singapore Airlines (SIA)’s youngest subsidiary airline Scoot which was originally intended as a medium-to-long haul budget carrier in contrast to Tigerair’s short-haul status. To be expected, Scoot is performing much better than Tigerair, which has been plagued by an ill-gotten past. Faced with stiff regional competition, the lines soon blur between the networks of the two brands as they lapse into each other’s domain. The intra-competition does not make economic sense, which led to a policy of co-operating rather than competing.

A new company Budget Aviation Holdings (BAH) was formed in May to manage the two carriers. So said SIA CEO Goh Choon Phong: “The integration has already led to commercial and operational synergies between Scoot and Tigerair that are providing growth opportunities for both airlines. Following a review, we have determined that the logical next step is to pursue a common operating licence and common brand identity to enable a more seamless travel experience for customers.”
BAH chief executive Lee Lik Hsin added: “A single brand is less confusing for consumers and more effective to build brand loyalty and affinity.”

Multiple branding within a family is not a new economic phenomenon. But it has not worked for the Scoot-Tigerair differentiation when the market becomes restricted by its defined limits that may hurt both carriers in their pursuit of growth, particularly for Scoot in its own right to tap into source markets to grow beyond those confines. Besides, the poor reputation of Tigerair does not help. More than that, what really is happening in the big picture is that the aviation landscape has shifted drastically. The so-called niche budget market has extended beyond its boundaries. Tigerair seems a lame and superfluous appendage when Scoot could do the job better, and the neater structure will better position the Group in an integrative strategy rather one that is segmented overall.

Singapore Airlines reports declining passenger numbers

Courtesy Singapore Airlines

Courtesy Singapore Airlines

Singapore Airlines (SIA) carried 1.51 million passengers in September – lower than both last year’s 1.57 million and last month’s 1.61 million passengers. Consequently passenger load factor was down 2.1 percentage points from last year’s 80.8 per cent to 78.7 per cent. Rival Cathay Pacific may take some comfort there that the downward trend was not a unique phenomenon when it reported its own lacklustre performance recently.

Except for East Asia which retained a flat performance, all sectors reported declining passenger laod factors, worst of all for Europe (down 4,8 percentage points) followed by South West Pacific (down 2.7 percentage points). The weaker demand for Europe may be attributed to the uncertainty of the region’s economic and geopolitical situation, but noteworthy is the performance of South West Pacific when Qantas was bucking the trend with record profits. As recognized by SIA in its statement, “the landscape remains challenging.” Competition is a given; the real poser is whether rival airlines are closing the gaps.

The good news, however, is that except for the beleaguered budget carrier Tigerair, the other two subsidiaries within the SIA Group – SilkAir and Scoot – carried more passengers although the passenger load factor also fell. Both airlines carried less than their capacity growth, but it looks like the region closer home is where the business is thriving best for now. Looking farther down the line, the high point would be the performance of SIA’s non-stop services to the US.