SCOOT, Singapore Airline’s (SIA) new low-cost spin-off, stands to gain much from its decision to operate Singapore-Sydney flights starting June 2012 (TTG Asia e-Daily, December 1, 2011).
At the moment, no other low-cost carriers ply the Singapore-Sydney route, giving Scoot ample time and opportunity to establish a monopoly at the lower end of the market, said Brendan Sorbie, chief representative South-east Asia, Centre of Asia-Pacific Aviation.
In addition, the Singapore-Sydney flights would also allow Scoot to go after Qantas’ premium economy segment, said Sorbie, who added that the low-cost carrier would easily fill its premium-class seats on the route, especially if it is "able to call on SIA’s existing corporate contacts”.
Susan Teng, National Association of Travel Agents Singapore (NATAS) – Outbound Committee chairman and general manager of Singapore-based Viewers Choice Travel, said: "The low-cost arena was something SIA had not tapped into before, but with Scoot, it is now able to cover every single corner of the (aviation) market.”
With its airfares poised to cost 40 per cent less than that those quoted by legacy carriers, Scoot's entry into Sydney is expected to “stimulate new demand by making travel more affordable, especially to Singaporean students in Sydney, or holidaymakers who are bypassing Sydney at the moment due to the comparatively higher cost of travel than to other (Australian) cities”, said Sorbie.
Australian Federation of Travel Agents CEO Jayson Westbury also views Scoot’s inaugural foray in a positive light. “Scoot will provide (Australian) consumers who want to travel to Singapore and beyond with more choice,” he said.
However, not all industry observers view Scoot’s entry into Sydney as a boon. Writing in the Sydney Morning Herald, former Qantas chief economist Tony Webber said: “Scoot is not in the business of helping Australian tourism. It’s in the business of helping Singapore tourism.”
Webber explained that Scoot would potentially carry 62,000 Australian tourists overseas a year, where they will spend up to A$200 million (US$205 million) – a sum they might have otherwise spent domestically.
Westbury, on the other hand, does not believe that Australia's domestic tourism will take a battering. “Australians choose to take overseas holiday some years and domestic holidays other years. It's all a matter of the consumer having choice," he said.
"In the end, everyone is a winner, as Scoot will bring more tourists to Australia and this is good for the two-way tourism story.”