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New Dreamliner fleet 'game changer' for Scoot: CEO

A fresh fleet of fuel-efficient Boeing 787s will prove a "game-changer" for Singapore Airlines' medium-haul budget carrier Scoot, the firm's CEO told CNBC.

Scoot is working towards replacing its entire Boeing-777 fleet with 20 new Boeing 787s – the Dreamliner – the first of which will be deployed in November, in a move that will help the airline save over 20 percent in fuel per seat.

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The company's chief executive officer Campbell Wilson told CNBC Asia Squawk Box on Tuesday that some of the cost savings will be passed to customers.

"It's a game changer for us, not only in terms of fuel savings and price savings we can offer, but also the flexibility it gives us to fly to different places," said Campbell.

"We have seen very clearly that lower airfares stimulate more demand and that fills our aircrafts and help us to earn money. So we will remain price competitive, but we may not pass all of it," he added.

Scoot's chief executive Campbell Wilson celebrates at the unveiling of the new low-cost carrier in Singapore on November 1, 2011.
Roslan Rahman | AFP | Getty Images
Scoot's chief executive Campbell Wilson celebrates at the unveiling of the new low-cost carrier in Singapore on November 1, 2011.

Scoot has expanded rapidly since its launch last June. The airline serves 13 destinations across eight countries in Asia and Australia, but one of the challenges it faces is the perception that cheaper fares mean less comfortable flights, with many flyers opting to pay extra for comfort when flying for longer.

Wilson said Scoot was working to tackle this stigma, and said the secret was all down to the aircraft, and the number of toilets.

"When you're flying distances of five hours or more you're using a wide body aircraft, [a Boeing] 777 or 787. It's a completely different ambience on board, more lavatories for one," added Wilson.

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In terms of market competition, Scoot's CEO told CNBC he did not see other budget carriers as a threat because they operated within a different segment of the market.

"Our business is slightly placed in a different position than other South East Asia low cost carriers (LCC)," he said.

"We tend to fly five to six hours. We fly to points in secondary places in China, east coast Australia and Japan. Most of the LCC in SEA (Southeast Asia) are usually within SEA and [the flights are] around four hours."

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Scoot established a partnership with Asian budget carrier Tiger in October 2012, involving marketing joint itineraries between destinations served by both airlines.

Reports have emerged of a collaboration between Scoot and budget Thai airline Nok Air, and Wilson confirmed plans were still on track, despite political turbulence in the country.

"The reasons for being in Thailand remain the same, it has these periods of instability but quickly rebounds and returns to the happy chaos that Thailand has," he said, adding that they were targeting the second half of this year as a starting point for the deal.

Scoot's 20 plane order includes 10 B787-9 aircraft - a stretch version of the Dreamliner with 375 seats -and 10 slightly smaller B787-8 aircraft. The order is set to be completed by mid-2015.

By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie

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