‘Bad old days’ of budget airlines are gone: Scoot CEO

‘Bad old days’ of budget airlines are gone: Scoot CEO

A320 Scoot Livery
Scoot's first A320 aircraft painted with the Scoot livery. (Photo: Scoot)

SINGAPORE: The dark days of budget airlines leaving passenger stranded in times of disruption are long gone, according to the CEO of Scoot, Lee Lik Hsin.

With Tigerair merged and then enveloped by Scoot in July, Mr Lee has taken the reins of Singapore Airlines’ consolidated low-cost brand, which he hopes will result in stronger reach across Asia.

At the top of the agenda is pushing forward with a quality product, at a time when competition among fast expanding budget airlines has never been fiercer.

“We want to be different and we want to have a proposition that customers aspire to,” he told Channel NewsAsia.

Scoot has enjoyed a fresh brand image and the benefits of brand new 787 Dreamliner aircraft, which have helped create a reputation of high quality since they were rolled out across the fleet since 2015.

Mr Lee argued that the difference between low-cost and full-service airlines is smaller than most people imagine and that flying budget does not have to be a big sacrifice in terms of experience.

“I think some of the negative perceptions around budget airlines have arisen from previous practices, as to whether or not we take care of our customers, particularly during times of disruption,” he said.

“The industry model has changed. It’s no longer the bad old budget airlines of the past, leaving you stranded. We all take care of our customers. We have to.

“Customers sometimes fret that services are being taken away from them and they actually have to do it themselves. But many customers would prefer that and from that they get a better price and better value."

New routes in China, including Kuching, Kuantan and Harbin, are a clear target for gaining growth.

“All budget airlines in the region including ourselves have very aggressive growth plans. It’s quite clear that growth in the budget segments of the business is going to be at a higher rate than the full service parts of the business.”

Singapore Airlines returned to profit in the first quarter of this year after a surprise fourth-quarter loss reported in May, while Scoot’s operating profit for 2016/17 was S$67 million.

The airline has now taken over two of the routes previously served by SIA regional’s arm SilkAir, taking its offerings to 60 destinations in 17 countries.

But Scoot still remains a far smaller airline than other regional budget giants like AirAsia and Lion Air. Mr Lee contended that innovation and discipline will ensure his brand will always be in the race.

“Competition is par for the course and it’s always been very intense in aviation. It’s not something new, it’s not something different, we just have to respond to adequately and stay one step ahead of the rest,” he said.

“Each of us is going to push one other much harder. Everybody is very focused on the business. We will continue to look at ways of getting our unit costs down and really the discipline and execution of our business to be consistent.”

Source: CNA/jb