Page 9 - AAA MARCH - APRIL 2016 Online Magazine

COVER STORY

Singapore International Airlines’
long-haul LCC arm Scoot is now
flying into profitability with an all-
Boeing fleet of 787 ‘Dreamliners’

its chief strategy and commercial officer. The also increased by $32 million on account of Jetstar and Qantas announced record
airline operates a fleet of 26 Boeing 737NGs a 37.0% growth in passenger carriage. The results. Jetstar Group earnings improved
(22 on dry lease and four on wet lease), two airline has a mix of 787-8s and 787-9s in its by $181 million, rising to $262 million. The
Airbus A320 family jetliners on wet lease fleet totalling 10 aircraft and is slated to Qantas Group announced that, “Combined
and the only Bombardier Q-400 fleet (13) in take delivery of 10 more ‘Dreamliners’ by earnings between Qantas Domestic and
India. With its LCC competitors IndiGo and early 2019. Company officials say it is too Jetstar Domestic rose more than 90 per cent
Go Air, months away from inducting new fuel early to discuss the acquisition of additional to a record $556 million.” The Jetstar Group
efficient A320neo family aircraft, Spicejet aircraft at this stage. Scoot is currently well operating margins have increased by 9.1%
urgently needs to finalise its acquisition of established in the market and with its fleet for an operating margin of 13.7 per cent in
new generation single aisle jetliners, either of new aircraft, a balanced route network the half and controllable unit costs across
Boeing’s 737 MAX or the NEO. Reports and a unit cost that had declined by 11% Jetstar’s domestic and international network
indicate that the airline is looking to place since the arrival of its 787s, is looking at new have been reduced by 2%. The Jetstar group
orders for an estimated 150 aircraft. destinations. The growing Indian market has delivered profits to the Group including
An interesting trend in the Asia Pacific is being eyed by Scoot, which expects to the first ever profit recorded for Jetstar
region are LCCs created by Airlines such as commence operations to 2-3 Indian cities Japan, since it commenced services in 2012.
Singapore Airlines and Qantas, which have within the first half of this year. Flights International sectors being serviced by
carved a niche for themselves and are now to Saudi Arabia will start from May. The Jetstar have also seen significant
starting to generate value for their parent challenges facing Scoot will be absorbing efficiency gains with the all-Dreamliner long-
airline. Singapore Airlines owned LCC, Scoot the 49% capacity increase (year on year) haul fleet. The Jetstar Group comprises:
showcased its Boeing 787 ‘Dreamliner’ at the and to establish itself on new markets while Jetstar Airways in Australia and New
Singapore Air Show to positive reviews and maintaining profitable yields. Scoot’s 787s Zealand (wholly owned by the Qantas
is now settling into a period of consolidation. are configured in a 335 seat (787-8) and 375 Group), Singapore based Jetstar Asia based
The four-year-old long-haul LCC has the seat (787-9) layout with in-seat power and in (managed by Newstar Holdings, which
world’s first all 787 fleet. “The 787 fleet has Wi-Fi. is majority owned by Singapore company
lowered costs by about 20 % in terms of LCC owner, Qantas Group announced Westbrook Investments and the Qantas
fuel consumption,” said CEO Scott Campbell, record first-half performance figures, and Group), Jetstar Pacific based in Vietnam
speaking at the Singapore Air Show. Scoot a 2015 calendar-year performance that (majority owner Vietnam Airlines and Qantas
has also announced its best ever financial was best in the 95 years of the Australian Group holding 30%) and Jetstar Japan, a
results, since commencement of operations national carrier’s existence. Group profit partnership between the Qantas Group,
in 2012, with an operating profit of S$18 before tax increased from $367 million in the Japan Airlines, Mitsubishi Corporation and
million ($12.7 million) being announced for the first half last year to $921 million. The dual Century Tokyo Leasing Corporation. Jetstar
quarter ending December 31, 2015. This was brand strategy, which has Qantas competing expects to take delivery of its first A320neo
the result of the entry into service of the more in the premium and business market and in the second half of 2016.
fuel-efficient 787s and lower fuel costs that LCC Jetstar targeting the leisure markets,
resulted in savings of $10 million. Revenue has paid off as both Qantas Domestic and
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