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Old 21st June 2018, 04:17 PM   #1
davidfusq
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Default Singapore Airlines fleet strategy: 737 transfers from SilkAir to Scoot

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The Singapore Airlines (SIA) Group plans to transfer 737-800s from its regional full service subsidiary SilkAir to the low cost subsidiary Scoot in the latest adjustment under the groupís ongoing strategic review. Potentially several 737-800s will be retrofitted to high-density all-economy configuration before entering service with Scoot, enabling the group to lower unit costs and compete more effectively on short haul routes now served by SilkAir.

SIA has been working to cut costs and improve profitability through several measures, including route transfers. Five routes have already been transferred from SilkAir to Scoot since late 2017, and several more transfers are likely over the next year.

As lower cost Scoot takes over more routes, a rebalancing of the SIA Groupís narrowbody fleet was inevitable. In hindsight, SIA overordered in 2012 when committing to 54 737s for SilkAir; at the time, Scoot had just launched operations as an all-widebody operator and Tigerair was not part of the group.

Source: CAPA https://centreforaviation.com/analysis/reports
Several things come to my mind:

1. Scoot will operate a mix of A320 and B737-800 narrowbody. Isn't it against the conventional wisdom of operating common fleet to achieve lowest cost? Did Scoot follow through with Tigerair A320 MOU for 37 A320neo in 2014?
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On 24 March 2014, Tigerair signed a Memorandum of Understanding (MOU) with Airbus for the purchase of 37 Airbus A320neo aircraft with 13 options. The aircraft will be powered by Pratt & Whitney PW1100 engines.
Source: Wikipedia
2. Since SQ wlll be refurbishing MI with new seats, will SIA Group recycle MI seats on hand-me down Scoot plane? Maybe reupholster the seat? Personally I think black faux leather made the cabin too dark and I prefer the Scoot B787 blue fabric seat.

3. Which are the routes to transfer to Scoot? I foresee many Malaysian and Indonesian cities primarily.
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Old 21st June 2018, 07:19 PM   #2
flyinghigher
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Originally Posted by davidfusq View Post
Several things come to my mind:

1. Scoot will operate a mix of A320 and B737-800 narrowbody. Isn't it against the conventional wisdom of operating common fleet to achieve lowest cost? Did Scoot follow through with Tigerair A320 MOU for 37 A320neo in 2014?


2. Since SQ wlll be refurbishing MI with new seats, will SIA Group recycle MI seats on hand-me down Scoot plane? Maybe reupholster the seat? Personally I think black faux leather made the cabin too dark and I prefer the Scoot B787 blue fabric seat.

3. Which are the routes to transfer to Scoot? I foresee many Malaysian and Indonesian cities primarily.
Seems quite messy, Scoot taking over several B738's then, SQ mainline also having B738's and potentially B737 Max 8's They should have just standardized one airline to absorb the B738 fleet. More costs are involved to maintain different aircraft fleets as well.
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Old 21st June 2018, 09:05 PM   #3
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Default Singapore Airlines to shift planes from SilkAir to budget arm Scoot Read more at http

Some new insights quoted here

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Scoot recently began listing job ads for Boeing Co 737 jet pilots despite operating a narrowbody fleet of rival Airbus SE A320s.

Brendan Sobie, chief analyst at the CAPA Centre for Aviation, an independent aviation research firm, said those destinations, which include Kuching and Langkawi in Malaysia, had a relatively low proportion of traffic transferring through the Singapore hub relative to other routes.

Sobie said several Indonesian routes could be transferred from SilkAir to Scoot, as well as others like Chang Mai in Thailand and Da Nang in Vietnam.

SilkAir has 32 737s on order. Sobie said it would have been more attractive for Scoot to add A320s for growth to keep its short-haul fleet all one type, but that would not have solved the problem of the looming 737 deliveries.

"Ultimately it is clear that Scoot needs additional capacity to take over more SilkAir routes and the transfer of the 737s was the best solution for the Singapore Airlines Group," he said.

"The route transfers should improve the group's profitability and long-term position, outweighing the additional costs associated with Scoot operating two narrowbody families."

Sobie said he expected the first jets would be transferred in late 2018 or early 2019, giving the airline time to remove business class seats from SilkAir jets and to hire pilots.
Read more at https://www.channelnewsasia.com/news...scoot-10456024
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Old 21st June 2018, 09:36 PM   #4
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Originally Posted by davidfusq View Post
Some new insights quoted here


Read more at https://www.channelnewsasia.com/news...scoot-10456024
Thanks for the article! I assume that the current B738's/Max8's will be transferred to SQ and the new ones on order to Scoot? (I still hope for b738's in SQ livery! )
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Old 21st June 2018, 09:37 PM   #5
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Would it not make more sense to transfer all the remaining 320s over instead?
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Old 21st June 2018, 10:53 PM   #6
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Would it not make more sense to transfer all the remaining 320s over instead?
The rest of the Airbus fleet currently with SLK are scheduled for delease / sale. The original intent was to operate an all Boeing fleet. If they were to transfer the aircraft over, won't they incur additional costs to refurbish the cabins and repaint the aircraft only to have to sell / return to lessor?
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Old 21st June 2018, 11:03 PM   #7
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Originally Posted by Scooter001 View Post
The rest of the Airbus fleet currently with SLK are scheduled for delease / sale. The original intent was to operate an all Boeing fleet. If they were to transfer the aircraft over, won't they incur additional costs to refurbish the cabins and repaint the aircraft only to have to sell / return to lessor?
They should have dropped the idea of operating an all Boeing fleet after the merger announcement.
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Old 22nd June 2018, 01:35 AM   #8
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I can't see a mix fleet for Scoot being the end of the world. At the end of the day SIA engineering will still be looking after the aircraft whether is has a Scoot SQ or MI paint job.
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Old 22nd June 2018, 01:36 AM   #9
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Originally Posted by flyinghigher View Post
Thanks for the article! I assume that the current B738's/Max8's will be transferred to SQ and the new ones on order to Scoot? (I still hope for b738's in SQ livery! )
The link suggests that the 17 737-800 going to Scoot and the 37 737 MAX 8 will go to SQ.
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Old 22nd June 2018, 02:32 AM   #10
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Originally Posted by FN-GM View Post
The link suggests that the 17 737-800 going to Scoot and the 37 737 MAX 8 will go to SQ.
Shifting one aircraft type to each airline will be a better solution and of course, SQ will get the newer aircraft. From what I see, they need to do this shifting because they ordered too much 737s and if all are transferred to SQ it'll be too much.
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Old 22nd June 2018, 02:39 AM   #11
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Originally Posted by FN-GM View Post
The link suggests that the 17 737-800 going to Scoot and the 37 737 MAX 8 will go to SQ.
If it is really all 17 738s going to Scoot, that would mean SilkAir wonít grow much beyond the existing fleet of 34 aircraft after accounting for A320 retirements. We will see MIís network be downsized to focus on regional points with high percentages of transfer traffic to feed SQ long haul whilst Scoot will serve smaller stations comprising of mostly local demand.
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Old 22nd June 2018, 05:15 AM   #12
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Originally Posted by ek&sq View Post
If it is really all 17 738s going to Scoot, that would mean SilkAir wonít grow much.
We have already seen some of the SilkAir routes moved to Scoot. This frees up capacity for new routes.
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Old 22nd June 2018, 10:52 AM   #13
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Originally Posted by ek&sq View Post
If it is really all 17 738s going to Scoot, that would mean SilkAir wonít grow much beyond the existing fleet of 34 aircraft after accounting for A320 retirements. We will see MIís network be downsized to focus on regional points with high percentages of transfer traffic to feed SQ long haul whilst Scoot will serve smaller stations comprising of mostly local demand.
MI is a dead horse anyway. With the announcement that MI gets merged into SQ it is clear that the business model of MI is obsolete. With the announcement of the transfer of aircraft and further routes to Scoot it seems clear that MI is in bigger trouble than the management would like to admit.

I honestly never understood why it was decided to go with a Boeing order for MI, from the fleet development point of view for MI as well as the group it didn't make sense to switch. I think in this case with the "I don't want to favor one manufacturer" policy the group shoot into their on feet.
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Old 22nd June 2018, 11:41 AM   #14
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Originally Posted by SQ025 View Post

I honestly never understood why it was decided to go with a Boeing order for MI, from the fleet development point of view for MI as well as the group it didn't make sense to switch. I think in this case with the "I don't want to favor one manufacturer" policy the group shoot into their on feet.
It was so that MI could fly long, thin routes such as Cairns, Hiroshima etc which would be uneconomical or range-limited on the A320s.
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Old 22nd June 2018, 02:03 PM   #15
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It was so that MI could fly long, thin routes such as Cairns, Hiroshima etc which would be uneconomical or range-limited on the A320s.
I agree that the Max make a certain economical sense, but for MI?. I believe they should have launched such long routes using the MAX under the SQ brand as such flights have anyway more connecting passenger potential (particularly Cairns).

Last edited by SQ025; 22nd June 2018 at 04:22 PM..
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