FOXTROTS

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.

October 25 2012

Singapore Airlines and Scoot. What is going on?

READING some travel industry press releases is like China-watching. It is important at least to read between the lines.

 

Thus with the Scoot announcement that it is acquiring 20 B787 aircraft. Half way into the announcement is the information that these 20 aircraft were originally ordered by Scoot’s parent, Singapore Airlines (SIA).

That means, I presume, that SIA no longer needs those 20 aircraft. That would be quite a change in terms of forward planning. Or is it something else?

Is SIA going to follow what we call the ‘J-Plan’*? This comes from activity at the Qantas group, where Jetstar (the International airline, not JSs for Asia, Australia, or New Zealand) is used for international route expansion because it is a lower-cost option. Qantas has been cutting its own international flights and some JS flights have filled these gaps.

The other clue in the Scoot announcement is that it still describes itself as a ‘longhaul’ LFA (low-fare-airline), which it clearly is not – it operates short- and medium-haul. Will it become longhaul when it gets SIA’s B787s?

But the biggest oddity in all this is why SIA has created no fewer than three other airlines – Scoot, Silk, Tiger.

We maintain airline groups need three types of airlines – FSA, LCA, LFA**. The SIA group has got one too many. SIA is the FSA, Silk could become the LCA, and Tiger the LFA – and Scoot was, and is, not needed.

However, as happens to most China watchers, it is frighteningly easy to get it completely wrong…

*It is not clear that Qantas has what we call its ‘J-Plan’. These changes might be one-by-one and not part of an overall plan. Or Qantas might prefer to downplay any J-Plan concept in order not to arouse angst amongst its aircraft operating crew.

 

 

 

**Airline types:

-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.

 

-LCA = low-cost-airline. (Not a low-fare-airline; see next.) An FSA but with lower operating costs (cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for instance), fewer fare types, which may have first and business cabins, and which allows bookings through travel agencies etc. Usually similar to the parent airline, but a different name, and competition against parent airline allowed.)

 

-LFA = low-fare-airline. The many essential elements that make a successful LFA include: market freedom in terms of routes and aircraft choice; single aircraft type; where relevant, competition against parent airline allowed; fares that are extremely low when booked at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no service frills; single economy-class cabin; no seat selection; two toilets for 150-seat aircraft; 20/25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.

 

The Fox

 

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