Scoot posts Bt636m loss in 2 years amid fierce competition
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Scoot, Singapore Airlines' long-haul budget carrier, has opened its books for the first time and the picture is not pretty. It revealed losses of more than Sing $25 million (Bt 636 million) in less than two years. The red ink comes amid intense competiti
“It's been pretty challenging” for carriers that are grappling with overcapacity as a result of airlines adding too many flights, said UOB Kay Hian's aviation analyst K Ajith. This has brought yields and margins down and affected Scoot as well, he said. The airline, which flies from Singapore to 12 places in Australia, North-east Asia and Southeast Asia, including Bangkok, has also been affected by Thailand's political instability, which has unnerved some travellers.
A slowdown in the China market could dent its performance further, added Ajith.
The disappearance of Malaysia Airlines Flight MH370 in March, which was carrying mainly Chinese travellers, has hit Singapore because Chinese tourists who visit Southeast Asia typically cover Singapore, Malaysia and Thailand. Scoot, which took to the skies in June 2012, flies to four mainland Chinese cities, as well as Hong Kong and Taipei.
But even as dark clouds are hovering above, the arrival of its new and more fuel-efficient Boeing 787-9 Dreamliners from later this year could prove a game-changer for the carrier, said analysts.
Scoot, which now operates older Boeing 777-200 aircraft inherited from parent company Singapore Airlines, should see at least a 20 per cent improvement in fuel burn, said OAG aviation consultant Mark Carlson.
