Integration of Scoot, Tigerair to strengthen SIA’s position: CEO

The integration of Tigerair and Scoot will strengthen parent company Singapore Airlines' position in the low-cost segment and provide new opportunities in a challenging global environment, SIA CEO Goh Choon Phong said Friday. In the second half of next year, Tigerair will come under the Scoot brand name and both airlines will operate under a single licence, according to a statement from Budget Aviation Holdings Friday, which owns and manages the low-cost airlines under the SIA Group. Commenting on the decision, Goh said the group realised that the creation of Budget Aviation Holdings in May was insufficient to capture the full benefits of an integration, and hence "the best way is to go with one brand". "There are a lot of synergies that we cannot fully exploit because they are still two different entities ... (under) two different AOCs (air operator's certificates) and therefore, different regulatory requirements," he said. "One single brand will bring about the ultimate benefit of a full integration in all aspects of the budget side of the business." Lee Lik Hsin, CEO of Budget Aviation Holdings, added that both Scoot and Tigerair have contributed to the group's profitability, with both airlines’ earnings improving over the past six months. The integration will help to improve revenue further, he said. "There's a limit as to what (economies of scale) can bring. On the revenue synergy side, however, I think it's fair to say we are a lot more optimistic about what we can get from a single brand."<br/>