Scoot sees some green shoots but still navigating the crisis

by Andreas Spaeth
13
October 01, 2021
scoot

Campbell Wilson, CEO of Singapore Airlines’ low-cost arm Scoot, is a Kiwi, and like everyone living in Singapore, he hasn’t left the tiny island city-state since the pandemic began in March 2020.

“If I apply for a visit to my relatives in New Zealand now, I get a slot in one of the allocated quarantine hotels in Auckland in February 2022,” Wilson told Airlineratings.com in an exclusive interview in Singapore in September.

Before Covid, the booming airline served 86 destinations from Berlin to Sydney, in 2019 it carried 11 million passengers, in 2020 it was barely two million, while in the first seven months of 2021, the number of customers shrunk to just 104,000 passengers.

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In September Scoot served just 26 destinations. Of its 54 aircraft, just five are currently parked for longer terms, the others operated on a rotation.

But a slight improvement can be detected and in September Scoot flew at 24 percent of its pre-pandemic capacity, while in June it was just at 17 percent.

Campbell Wilson

But it is still tough.“At the moment we are just navigating the crisis,” admits Wilson.

“Currently the cargo revenue is the same as the passenger revenue,” he reveals, which is usually unheard of from a low-cost carrier. “The freight rates are very high right now and it helps us to cover the variable cost.”

As with many legacy carriers during the height of the global pandemic in 2020, Scoot now has to focus on cargo as Singapore itself and most of Scoot’s main markets remain off-limits.

“India is totally closed, to Australia we carry sometimes only 25 passengers because of the quarantine rules Down Under, and to China, we have one flight a week to five destinations each, while before the pandemic we did 105 China flights every week.

But it is still important to maintain the strategic connectivity in our network,” stresses Wilson. Two Airbus A320s are used as full freighters with the seats removed. “Earlier we had freight also loaded onto the passenger seats but we couldn’t stack cargo above seat height, as it is still a requirement to enable the cabin crew’s line of sight above the seats.”

Boeing 787-8

Scoot’s fleet of twenty Boeing 787s (ten each of 787-8s and 787-9s) comes in handy for these strange times offering a big cargo hold capacity, especially when the cabin is almost empty of passengers.

“Ahead of Valentine’s Day, we flew lots of flowers from China,” shares Wilson. Since August, Scoot is back in Europe, even opting to fly intra-EU Fifth Freedom routes between Berlin and Athens both ways, bolted onto the long-haul stretch to/from Singapore.

That proved to be successful in the late European summer season, where there was a considerable travel demand within Europe and Scoot offered 787 comforts, even in Economy still superior to Ryanair and other local LCCs, and that at rock bottom fares from €50 one way.

“From Berlin to Athens we had a lot more passengers than to Singapore, the aircraft on these intra-EU flights was sometimes half full,” raves Wilson, showing how a half-filled cabin these days can be seen as a big success.

In reality, these flights were profitable because of their cargo hauling: “There was a lot of cargo, mostly from Europe into Singapore carrying food and e-commerce goods,” says Wilson. “Our business is driven by cargo and it is opportunistic to also carry passengers.”

During the crisis, Singapore Airlines has reduced its brands from three to two, with routes of dissolved Silk Air being equally shared between the mainline and its LCC arm. “We took over about 13 former Silk Air routes,” says Wilson. In June 2021, Scoot premiered its newest aircraft, the Airbus A321neo, of which it has four of the 16 ordered.

Airbus A321neo

It also expects 28 A320neos and all its 26 A320ceos will be going out within the next three years.

The A321neos are perfect in their capacity just between the A320s and 787s,” raves the CEO.

They will open up many new route opportunities for Scoot, from northern India to Pakistan to destinations currently served by 787s such as Beijing, Seoul, or Fukuoka.

Scoot is a very important tool for the Singapore Airlines group with the two contrasting brands covering both ends of the market – leisure and business.

And with the group well insulated by massive capital injections of its majority owner, government-owned Temasek, Wilson is certain: “We know demand is there, but currently actively constrained. But there is no doubt that there is a future for us.”