Scoot and Tigerair to be run by one CEO

Budget carriers Scoot (left) and Tigerair.
Budget carriers Scoot (left) and Tigerair. PHOTOS: SCOOT, ST FILE

Holding company for the two carriers likely, Tigerair boss expected to helm it: Sources

Budget carriers Scoot and Tigerair will soon be run by one chief executive, paving the way for closer ties and possibly the eventual merger of both airlines.

A holding company will likely be set up to house and run the two Singapore Airlines (SIA) subsidiaries, sources said.

The Straits Times has learnt that the prime candidate to helm the new entity is Tigerair's current boss, Mr Lee Lik Hsin.

 

Scoot chief executive Campbell Wilson, who set up the airline and launched its first flight in 2012, will return to the parent carrier and take on a new posting. His impending exit has prompted chief commercial officer Steven Greenway to tender his resignation. Both men will leave Scoot before the end of the month, sources said.

When contacted for comments, a Scoot spokesman referred The Straits Times to SIA. Spokesman Nicholas Ionides in turn reiterated comments made by the airline's chief executive, Mr Goh Choon Phong, at a briefing last week.

Mr Goh had said then, when asked about plans for Scoot and Tigerair, that the group would be announcing integration plans in due course for both carriers to work more closely together.

The writing was on the wall when SIA announced last November its intention to take full control of Tigerair, which it then owned about a third of, industry analysts said.

Back then, SIA said the plan was to eventually delist Tigerair to drive deeper cooperation and synergies between the group's different passenger carriers - SIA, SilkAir, Scoot and Tigerair. Tigerair has since come under the group's total control and been dropped from the Singapore Exchange.

SIA has adopted a multi-prong strategy against its rivals, with SIA and SilkAir in the premium air travel market, Tigerair focused on regional low-cost flights, and Scoot operating medium- and long-haul budget flights.

Even as plans for closer ties between Scoot and Tigerair have been set in motion, it is understood that there are no immediate plans to merge the two brands.

While a merger is practical in the long term, the move would have implications for airline and aircraft registration as well as licensing. It is also complicated, and sometimes not possible, to transfer air traffic rights granted by foreign regulators from one airline to another.

If a full merger happens, analysts said, it would make sense to drop the Tigerair brand, which has been less successful than Scoot.

Mr Shukor Yusof of Endau Analytics said: "Scoot... has a brighter future, I would imagine."

The move towards closer ties would be good for the SIA group, he added. "It makes sense to have one CEO and streamline operations at Scoot and Tigerair to push into the discounted market, which is key, given the tough competition SIA faces in high-yielding markets from the Middle Eastern airlines."

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A version of this article appeared in the print edition of The Straits Times on May 18, 2016, with the headline 'Scoot and Tigerair to be run by one CEO'. Print Edition | Subscribe