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Scoot Airlines fast rising in budget carrier market

CEO says it focuses on medium-distance flights and leisure-oriented travelers

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Published : 2013-06-23 20:41
Updated : 2013-06-23 20:41

The rise of time-rich and cash-poor travelers has opened a golden business opportunity for Asia’s budget carriers. Scoot has seized it by focusing on leisure-oriented and medium-distance flights.

“There has been a really fast, large growth in the number of people who are now used to comfortable, low-cost travel,” Scoot Airlines chief executive Campbell Wilson told The Korea Herald during his recent 24-hour visit to Seoul.

Scoot Airlines, a wholly owned subsidiary of Singapore Airlines Group, launched operations last June.

With the latest start-up of its low-cost carrier Scoot, Singapore Airlines Group is now equipped with a full carrier lineup: premium and long-range carrier Singapore Airlines, full-service and short-range SilkAir, no-frills and mid-distance Scoot Airlines and no-frills and short-distance Tiger Airways.

Scoot seems to have successfully penetrated the niche market of low-cost, medium-distance flights as it has carried over 1 million passengers over the past year. Scoot has 402 seats per aircraft. 
Scoot Airlines CEO Campbell Wilson

“I started when the team was five people strong. Two years later, it was an airline with a million people carried already,” CEO Wilson said.

Before the launch of Scoot Airlines, Singaporeans, who usually fly five hours per leg, had no choice but to use full-service premium carriers, regardless of their travel budget.

“We started in order to target the medium-distance, low-cost market, five- to eight-hour distance from Singapore,” the 41-year-old New Zealander said.

Wilson pointed out that low-cost carriers started service to Singapore around 2004. In about eight years, he said, this segment grew to account for about 30 percent of the total market going through Singapore Changi Airport.

The CEO stressed that the greatest thing about Scoot is its capacity to enlarge the air travelers’ pie as a total, without cannibalizing larger and pricier carriers.

He took the example of the Singapore-Sydney route, the most popular line between Asia and Australia, with three full-service carriers operating seven flights a day.

“It’s a very mature market,” he said. “Twelve months before we started flying, the number of Singaporeans arriving in Sydney declined by 0.4 percent. In the six months since we started flying, which was once a day, the number of Singaporeans arriving in Sydney increased by 32.9 percent.”

At the same period, the number of people going on vacation bounced from a 4.9 percent decline to a 64 percent growth. “So clearly, we have stimulated the (air travel) market, and encouraged more people to travel more often. The total pie grew without cannibalizing Singapore Airlines,” he said.

Regarding the most important qualification for a Scoot staff member, Wilson picked personality, which he referred to as “Scootitude.”

“The most important thing for us is the personality. We want people who can have a chat, a joke, and have fun,” said the CEO.

“Our positioning is leisure-focused and to the people that travel for leisure, typically time-rich, cash-poor ― which in turn means generally the young, or the retiree market,” Wilson said.

“And if you are focusing on the young, it might not work for you to have a stuffy, 60-year-old in a suit and tie,” he added. “In some respect, I think perhaps youth was an advantage in that.”

Although the CEO agreed that Korea is one of the leading countries in technology, he was confident that the travel agency’s flight booking service will not be completely replaced by online booking websites. Scoot has selected Dongbo as its general sales agent in Korea.

By Chung Joo-won (joowonc@heraldcorp.com)

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