Scoot! SQ's LCC gets a name

[flying.monkeyz]

I agree with you. Suprise to see SIA make this move.

It's also known as KSS - Kia Su Syndrome. Other people have, we must also have!

[concept|infinit]

To me, it still puts severe pressure on Silkair to drive prices further downwards, no matter how fluffy-nice SQ wants to make it sound. Sounds like cannibalisation, pure and simple.

Yeah, to my friends from Europe who've travelled SEAsia, MI is a budget airline. MI is going to have a very tough time marketing itself as a premium regional carrier now with all the LCCs around. Maybe its the start of the end for MI?

[MAN Flyer]

I suspect this venture is more to prevent others grabbing too much of what they previously considered their home market share, and thus make themselves stronger, rather than to try and make the sort of profits SQ have enjoyed, which would be rather difficult.

[flying.monkeyz]

Singapore's long-haul LCC 'news' is old - do not get confused

There has been an onslaught of news in the past day about Singapore Airlines' new low-cost, medium/long-haul carrier's launch plans. Do not get confused: these reports are old and incorrect.

The reports originated with Singapore's the Strait Times, who said the carrier – officially unnamed, although "Scott" has been trademarked – would launch in Apr-2012. While the Strait Times did not specify its sources, the information originated from tender documents the upstart LCC, trading as New Aviation, issued for cabin seats and in-flight entertainment and connectivity. These documents, with comment from Singapore Airlines, formed the basis of our 1-Sep-2011 article on the topic.

While the tender documents do indicate an estimated entry into service date of 1-Apr-2012, that date quickly became unattainable. The launch date is contingent on how quickly seats and IFE systems can be delivered. As we wrote on 1-Sep-2011:

Typically seat vendors need at least 12 months of lead time. As indicated in its tender with the estimated aircraft in-service dates, New Aviation was initially hoping the seats and IFE systems would be supplied by Apr-2012. This would allow the aircraft to be reconfigured as soon as it comes out of SIA’s fleet and enable proving flights to begin in Apr-2012, paving the way for a potential launch in May-2012. However, in the likely event the first batch seats and IFE systems are not ready in time, the launch may not take place until later in 2Q2012 or early 3Q2012.

As we hinted, New Aviation operated on too tight a timeframe for its initial aircraft to be outfitted. This is why Singapore Airlines is now denying reports New Aviation will launch in April.

When the launch date – likely late 2Q2012 or early 3Q2012 – is announced, there may be reports saying the launch has been delayed. Such inevitable reports will be unfair to SIA and New Aviation as the Apr-2012 launch date specified in the tender documents was very, very tentative, not public and quickly adjusted.

Once the topic is put in context regarding time, the plans and ambitions of New Aviation are very interesting. The carrier is targeting a higher growth rate than AirAsia X, plans to have a 400-seat cabin (likely meaning 10-abreast on the B777-200) and hopes to introduce wireless IFE to provide entertainment and reduce aircraft weigh. One question going forward is if wireless IFE is still attainable given how new the innovative system is.

http://www.centreforaviation.com/blo...confused-60469

[SQ238]

I wonder if they have made a decision on what company is doing the website. :=)))

[lingua101]

Not sure if I should start a new topic, but I think this is still have some relevancy with the Scoot. I wonder why SQ needs to create this Scoot Air. It has already Silk Air as subsidiary right. And MI flight is complement to SQ flights (no overlapping, with the exception of KUL).

Why can't they combine SQ and MI into SQ and use MI as the "new" budget airlines rather than creating a new airlines?

Sure there will be a cost associate of building up a new airlines right (registration, etc etc)

[SQ_fanatic]

Not sure if I should start a new topic, but I think this is still have some relevancy with the Scoot. I wonder why SQ needs to create this Scoot Air. It has already Silk Air as subsidiary right. And MI flight is complement to SQ flights (no overlapping, with the exception of KUL).

Why can't they combine SQ and MI into SQ and use MI as the "new" budget airlines rather than creating a new airlines?

Sure there will be a cost associate of building up a new airlines right (registration, etc etc)

I think while MI might not be 'exactly' a premium carrier (no IFE, etc), it tries to be serving from the mid to upper segments of the market. Traditionally, it tries to cater to passengers who wants to travel to more 'exotic' destinations with 5h radius. SQ will then serve the traditionally more 'premium' and less exotic routes?

Scoot, I assume, will be a budget carrier (no frills) which may serve a entirely different segment. It's also intended to be serving long haul routes. IMO, it's a strategy to gain back market share from air asia X 's success.

Not too sure if SQ has the sufficient expertise in the lower segments of the market. Look at Tiger?

[lingua101]

I think while MI might not be 'exactly' a premium carrier (no IFE, etc), it tries to be serving from the mid to upper segments of the market. Traditionally, it tries to cater to passengers who wants to travel to more 'exotic' destinations with 5h radius. SQ will then serve the traditionally more 'premium' and less exotic routes?

Scoot, I assume, will be a budget carrier (no frills) which may serve a entirely different segment. It's also intended to be serving long haul routes. IMO, it's a strategy to gain back market share from air asia X 's success.

Not too sure if SQ has the sufficient expertise in the lower segments of the market. Look at Tiger?

I understand MI was setup to serve that "exotic" market. But look at it now. It seems to me MI will get the route which need smaller aircraft than B777. SQ used to have A310 to serve this "smaller" market. Now with their "smaller" aircraft is B777-200 (or A330), it may time to just merge MI back into SQ right.

Those who fly to Medan, Surabaya, Penang cannot clock into *A anymore now.

[kelvgoh]

To my (untrained) mind, it's probably all about an effort to make the consolidated balance sheet look better.

[lingua101]

To my (untrained) mind, it's probably all about an effort to make the consolidated balance sheet look better.

but if u have 3 companies then you need to have 3 ceo, 3 cfo, 3 of everything.... isn't it more cost? then how the consolidated balance sheet will be better?

[kelvgoh]

Caveat: I'm not an accountant so I'm happy to be corrected.

The costs incurred by each of the subsidiaries are tallied up at subsidiary level. The subsidiaries can operate a different spending/financial policy from the parent company. This means that they can, for example, pay their staff less, not serve complimentary food on board, not pay for in-flight entertainment rights, engage cheaper suppliers etc. The more questionable things would be whether the subsidiary can adopt a different maintenance policy, insurance policy, benefits policy etc.

Where it is possible, the subsidiary can utilise some of the services provided to the parent company at more or less "preferential" rates.

Through balancing expenditure with income, all the subsidiaries have to do (in very simple terms) is to ensure that when the subsidiary compiles its accounting records at the end of the year, it turns in a profit (even if it is marginal). Subsidiaries may even benefit from tax incentives/rebates that the parent company may not be entitled to.

Once all the subsidiaries tally up their accounts, they are added to the parent company's consolidated group accounts (in very very simple terms) as more or less a stand-alone entry - i.e. profit/loss from subsidiaries.

So in (again very simple terms), as long as this entry is a profit, it is a good thing for the group. They strip off the not-so-profitable elements of their business, apply a different expenditure model to it, and turn it profitable.

Legally speaking it is also more "convenient" to have a subsidiary company operate parts of a business which have fundamentally different objectives from other parts of the group business. Among others, the directors of the subsidiary only have to take into account the "well-being" of the subsidiary when taking decisions, and don't have to take into account the "well-being" of the entire SQ group.

(very simplified account and very happy to be corrected)

[RHG]

I wonder if they have made a decision on what company is doing the website. :=)))

I'm aware that Accenture has been heavily involved in consultancy for SQ. If they were behind the website, i would be worried.

As for the subsidiary issue, some of the benefits only occur due to the singapore business environment.

[kelvgoh]

I'm aware that Accenture has been heavily involved in consultancy for SQ. If they were behind the website, i would be worried.

As for the subsidiary issue, some of the benefits only occur due to the singapore business environment.

Website designers are a company named Sapient Interactive.

[poopbunny]

It's also known as KSS - Kia Su Syndrome.

I really wished they applied KSS before launching their broken website.

[9V-SPL]

Singapore Airlines’ ‘Scoot’ unit may fly 777s to USA

http://aviationnewsdaily.com/2011/10...y-777s-to-usa/