Scoot continues to study European markets to support long haul low cost strategy

6 May, 2017

Asian carrier Scoot faces some critical decisions in the coming months as the Singapore Airlines LCC subsidiary begins long haul operations. The carrier recently took delivery of its first Boeing 787 configured for long haul flights and is about to take its second long haul configured aircraft, followed by two more in the current fiscal year. But, it has currently only announced just a single long haul destination.

Scoot so far has only committed to introducing flights between Singapore and Athens, which will commence from June 20, 2017 with four weekly flights, but will be downgraded to only two weekly flights from October 2017. The airline quickly needs to decide on at least two more long haul routes for its sub fleet of four long haul equipped Dreamliners. Potential destinations in Europe and Hawaii have been under consideration for more than a year, but Scoot has not had any new route announcements in nine months.

While Scoot has so far not directly considered the UK, due to overlap with Singapore Airlines, and Germany, due to overlap with the Singapore Airlines and Lufthansa joint venture, Norwegian’s recent decision to launch London Gatwick – Singapore flights and other potential Norwegian routes into Changi Airport significantly changes the competitive landscape, and could see the Scoot operation used by the group to be more competitive against the LCC rival.

Scoot has until now focussed on the medium-haul market. Its Athens launch marks the return of the Singapore Airlines Group into the Athens market. Full-service carrier Singapore Airlines previously served Singapore – Athens up to summer 2012 with two weekly Boeing 777-200ER rotations in the winter and three return flights in the summer. It resumed a seasonal summer offering in 2014 and 2015 but did not resume flights last year.

Scoot says the commencement of the service to Europe is part of the Singapore Airlines Group’s strategic move to “stimulate passenger traffic between Asia Pacific and Europe, as well as to boost connectivity through the Singapore hub”. It will be the only non-stop connection into the Asia Pacific region from Athens.

Like many of the European and Asian flag carriers, Singapore Airlines has been hit hard by the rise of the Gulf hub carriers. Having previously held a dominant position in the Athens – Asia Pacific market with its own flights, it has seen its market share decline.

Traffic data from OAG shows that an estimated 620,000 passengers flew between Athens and destinations across Asia Pacific and Australasia last year with the markets of China (18.3% share) and Australia (17.6%) dominating these flows. Singapore was the seventh largest country market (5.2% share) and Changi International the sixth largest origin and destination airport.

Singapore Airlines had just a 0.8% share of the total Athens – Asia Pacific and Australasia market, according to the data. This didn’t even rank the airline within the top ten operators in a market dominated by Qatar Airways (30.0%), Emirates Airline (14.6%), Etihad Airways (14.6%) and Turkish Airlines (12.2%). The Singapore Airlines share is down from 6.2% in 2010 and a high of 20.3% in 2003.

READ MORE… Singapore Airlines needs to accelerate Scoot expansion in Europe