SINGAPORE - Budget carrier Scoot is poised to start its transition to an all-Boeing 787 fleet as it takes delivery of its first Dreamliner next month. The carrier will progressively phase out its B777 aircraft and eventually expand its network once again as more 787s arrive.
This coincides with efforts to deepen its alliance with short-haul budget carrier Tiger Airways, having received the green light from the Competition Commission of Singapore in August, as well as the launch of joint venture NokScoot in Thailand come first the quarter of 2015.
Taken together, the shift to more fuel-efficient Dreamliners as well as additional network points and distribution from partners such as Tiger could set the stage for a stronger performance as the fledgling carrier continues to work towards profitability.
Scoot - which took to the skies in June 2012 - reportedly lost a cumulative S$25.2 million in 2012 and 2013.
"It was always going to be measured in years, and not just a couple of years," said chief executive Campbell Wilson on profitability, stressing that wide-body, medium-haul operations are a challenging segment of the low-cost carrier market.
But he remains optimistic, highlighting that Scoot's performance in over two years of flying has been encouraging.
Scoot's first 375-seater B787-9, replacing one of Scoot's 777-200s, will be deployed to both Perth and Hong Kong starting January next year. By around 2019, Scoot will receive 10 each of 335-seater 787-8s and 787-9s.
This comes as Scoot has largely put growth on hold for about a year in anticipation of its new aircraft. However, it has bumped up frequencies on certain existing routes (such as Nanjing and Qingdao) and temporarily adjusted frequencies downwards in other markets (such as Australia and Tianjin).
Overcapacity and a weak Australian dollar have made Down Under a challenging market to operate to, while demand from Chinese travellers eased in the wake of stricter regulations being slapped on tourist packages and the disappearance of Malaysia Airlines flight MH370.
In addition, political tensions and the military taking over in Thailand have also hit demand for Bangkok.
But for Scoot, China has bounced back - potentially because its chosen destinations are underserved - while loads have been picking up for Thailand, although yields are taking longer to come back, said Mr Wilson.
By August next year, Scoot will essentially retire its existing fleet of six 777-200s by swapping them out for six 787 aircraft. The Dreamliners will also offer in-flight Internet and in-seat power throughout the aircraft, which provides additional avenues for ancillary revenue.
The new seats were on display over the weekend at Scoot's Ultimate Take-off Challenge at Marina Square.