Scoot Growth On Hold Thanks To 737 MAX Catastrophe

Singapore Airlines Group-owned low-cost airline, Scoot, expects growth to pick up in 2020, when more aircraft are added to Scoot's fleet along with the expansion of Scoot's route networks, says Mr Lee Lik Hsin, CEO of Scoot Airlines.

Whilst speaking to Chanel News Asia (CNA), Mr Lee said that the grounding of the Boeing 737 MAX worldwide meant that the growth this year will not be "to the intended scale". Scoot's sister Airlines, SilkAir, has planned to transfer 14 Boeing 737-800s to Scoot, but the grounding has put the transfer on hold. This has led to a shortage of planes to operate Scoot's flights.

Photo Credits: AeroNewsX/Paul Schmid (@str_aviation)

Singapore Airlines Group announced that Scoot will be leasing between 10 and 12 Airbus A320s over the next two financial years. This helps, though not to the full extent for 2019.

The CEO explained that they are 'looking for aircraft' but are still 'fairly confident that we will get the numbers we need. So in 2020, I think the growth plan will be back on track,' Mr Lee continued.

Besides leasing aircraft, Scoot planes to expand its route network in the coming months to include more destinations in China and Indonesia. Some of these routes was previously operated by SilkAir.

Newly added routes (China)

1. Wuhan

2. Changsha

3. Fuzhou

4. Kunming

Newly added routes (Indonesia)

1. Balikpapan

2. Lombok

3. Makassar

4. Manado

5. Semarang

6. Yogyakarta

Scoot has already taken over the Singapore - Wuhan route as SilkAir prepares to merge with Singapore Airlines.

Scoot was the only SIA Group unit that recorded an operating loss in the last financial year, which came in at S$15 million, as compared to its operating profit of S$78 million the year before. Scoot has closed down several non-performing routes such as those to Lucknow, Kalibo, Quanzhou and Maldives from Singapore.

Regarding long-haul, low-cost operations, Mr Lee described the business model as a "fairly niche" one, with Scoot having "experimented" and receiving mixed results. Scoot has pulled back its services to Honolulu, but continues to operate other long-haul flights from Singapore to Berlin and Athens. Mr Lee added that Europe would most likely be the continent for long-haul expansion if Scoot were to launch a new long-haul route in the future.