Oct 31, 2013

Scoot's CEO talks about early deployment of B787s into Japan route

Shigeki Tsubokawa, president Japan/Korea branch (left) and Campbell Wilson, CEO (middle)

Campbell Wilson, CEO of Scoot Pte Ltd. (SCO), a low-cost carrier (LCC) based in Singapore, held a press briefing in Tokyo last October 28 to talk about the company's business overview and plans. The conference was also held to commemorate the first anniversary of the Narita-Taipei-Singapore route on October 29. SCO is scheduled to take in a total of 20 B787 aircrafts between the fourth quarter of next year until 2018 (comprising 10 units each of the Dash-8 and Dash-9 models), thereby becoming the first LCC to own B787 planes. In this regard, Wilson said that, "We will deploy the B787s to our routes one after another by the end of next year. We are eyeing the early deployment of the first or second aircraft to the Narita region as well."

In his presentation, Wilson discussed the growing LCC (passenger) market, saying that, "The operation rate of LCCs to/from Singapore's Changi Airport stood at 4% in 2004, but jumped to 33% in 2012" and "The share of LCCs in seat occupancy in Southeast Asia has also risen to 57%."

According to Wilson, SCO recorded 92% in passenger load factor (LF) in the Japan route in the third quarter (July-September) of this year. "The number of passengers to Japan from Singapore has ballooned by 65% in June compared to the same period last year, and then increased by 33% and 50% in July and August, respectively," he pointed out, indicating its robust passenger business as the sole LCC serving the Singapore-Japan route.

SCO develops route networks that specialize in medium/long-distance courses, currently operating flights in 13 cities in seven countries, comprising Japan, South Korea, China, Taiwan, Thailand and Australia. It presently owns six B777-200 aircrafts. With the introduction of the B787 planes in/after fall next year, the company intends to expand its network not only to cover Asia and Oceania, but also India and the Middle East. As for the Japan route, Wilson noted that while they are thinking of boosting flights or increasing new flight destinations, they have yet to decide on the details of such plans.

With long-distance routes, the costs increase the longer the distance gets, but Wilson still expressed SCO's intention to develop routes in this segment, saying that, "We are considering the launch of new routes that are farther than the Sydney route (with flight time of about eight hours), which is our longest route at present," and "We may incur costs in the process, but these routes (long-distance routes) are attractive. We will develop routes in the future, centering on new routes with maximum flight time of nine hours."

As for the cargo business, Wilson claimed that, "Cargo sales account for a little less than 10% of our gross sales," adding that, "With the B777-200s, we will have the capacity to haul as much as 20 tons of cargoes, depending on the amount of luggage carried by passengers." At present, the cargo sale/marketing activities of SCO is handled by the group company Singapore Airlines Cargo through the purchase of cargo space. The contracts come in multiple years that are concluded through competitive bidding, with SCO conducting another competitive tender (for the sale of space) after the maturity of the said contracts.

Shigeki Tsubokawa, president of SCO's Japan/Korea unit, was present at the press briefing as well, where he said that, "The average monthly cargo transport volume in the third quarter (July-September) evolved in the 7-8-ton level" and "In/after the rollout of the B787 aircrafts in the Japan route, we envision transport volume of around 10 tons monthly." Transport capacity via the B777-200 goes to a maximum of about 20 tons. The Japan route goes through Taipei in both the inbound and outbound legs, so the aircrafts do not need to load as much fuel as in long-distance routes, thereby making it a route where maximum supply can be utilized. "We have even experienced hauling nearly 20 tons of cargoes (per month)," claimed Tsubokawa.

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