Cargo helped Scoot survive pandemic

Cargo helped Scoot survive pandemic

Low-cost airline Scoot has survived the pandemic with the help of strong shareholder support, income from robust cargo services and employee cutbacks, according to the airline's chief executive.

CEO Campbell Wilson said on Tuesday the airline had resumed services to 26 destinations, from the 68 cities prior to Covid-19.

Scoot, a low-cost subsidiary of Singapore Airlines (SIA), planned to restore services to all destinations in Thailand when more restrictions have been eased.

Mr Wilson said at a press conference that the airline had reduced operating costs through a variety of methods during the past 13 months of the pandemic. These included downsizing staff, rescheduling fleet deliveries and dissolving a joint venture airline with Nok Air, called Nok Scoot.

As part of SIA, Scoot received financial aid from shareholders, who provided full support for its operations.

SIA, which has state fund Temasek Holdings as a major shareholder, last year announced it secured up to S$19 billion of funding to cope with the liquidity crunch.

The budget was said to be one of the largest in the global aviation industry during the pandemic.

Mr Wilson said in addition to shareholders' support, the airline benefitted from the Singaporean government’s stimulus packages to help maintain jobs.

This programme provided broader support to all industries in the city state, not only the aviation sector.

He declined to say how many staff were laid off during the past 13 months.

Mr Wilson said even though the average passenger load of Scoot’s flights was currently only 12-15%, much lower that pre-pandemic, cargo services had seen stronger demand and provided important revenue in the past year.

“Cargo services enable us to sustain flights. But leisure demand might remain low, as due to restrictions people cannot travel like they did during the pre-pandemic period,” he said.

Scoot had resumed services to 26 destinations from 68 total cities prior to the epidemic, including Singapore-Bangkok with the new A321neo aircraft, he said.

The airline had ordered 16 of the new model passenger jets since 2019 to replace ageing aircraft, betting its fuel efficiency and longer range would lower operating costs, Mr Wilson said.

Scoot would consider more flights to Thailand, depending on the government’s travel policy, he said. If the country reopens as planned, the airline would resume direct flights from Singapore to Phuket, Chiang Mai and Hat Yai.

It also hopes to restart the Bangkok-Tokyo service whenever conditions permit.

As Thailand iaunching its reopening with the Phuket sandbox, he said, Scoot would not enrol in the programme in the early phase, leaving SIA to lead the way for the group. SIA  already planned direct flights to Phuket from next month.

“Even though it’s hard to predict the future of the aviation business, I’m confident about the fast growth of the Asia market.

"Many countries such as the US, Europeam countries and Australia have reopened with a surge in leisure demand. We expect to see that happen in Asia when there are fewer travel restrictions,” the Scoot CEO said.

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