Singapore to launch new budget airline ‘Scoot’

CNN, Liz Neisloss

Singapore (CNN) – Singapore Airlines has launched a new long-haul budget airline called “Scoot” which will offer airfares at 40% less than full-services airlines.

Flights are expected to begin in mid 2012 with destinations in Australia and China. Specific cities will be announced in the months ahead, airline officials said.

The no-frills airline will have an initial fleet of four Being 777 aircraft, purchased from its parent company Singapore Airlines (SIA) which made an initial investment of $223 million. The new airline is banking on creating a strong brand identity with its unusual name.

“Scoot” CEO Campbell Wilson says the name is “short and snappy” and “stands out.” “An airline with a different attitude.  People with a different attitude – Scootitude,” says Wilson.

Wilson told reporters the budget travel segment had grown “from nothing” to nearly a quarter of passenger traffic though Singapore’s Changi Airport in less than a decade. “They’re going after the low end of the market – which is much faster growing than the premium sector.  In order for SIA to grow, they’ve come to realize they have to go after this segment,” says Brendan Sobie, senior analyst with CAPA, Centre for Aviation – an Australia-based global aviation company.

In this segment “Scoot” will be competing with AirAsia X, a long haul budget carrier based in Malaysia, and with Singapore-based low cost airline JetStar, a subsidiary of Qantas. Singapore Airlines is also a majority shareholder in Tiger Airways, a Singapore-based budget carrier for Asia routes.

Scoot is hoping to offer a wireless in flight entertainment system – which allows passengers to use their own devices to log into the entertainment system.  Getting this relatively new technology in place by a mid-2012 launch may be a challenge for Scoot but it is “safe to say this is a future standard for the industry,” Sobie says.

Branding is always important for an airline, but “for this sector of the market branding is even more important,” says Sobie.