SIA / Tiger Air

SIA / Tiger Air: Scoot, the new medium-to-long-haul budget carrier of SIA will serve the Singapore-Bangkok route from July, putting it head on with its bigger sister Tiger Air. Tiger is the short-haul budget unit of SIA. Scoot says it is to provide more connectivity for its guests from Australia and China to go to Bangkok via Spore. Yet we note that Tiger also flies to Australia. Scoot is offering a promotion of $88 for a SG-BKK return trip, cheaper than the current fare of ~$200 from Tiger. Scoot will make its inaugural flight on Jun 26, with Sydney the first destination. Scoot’s decision to embark on short haul routes may be understood from Air Asia X’s (Air Asia’s budget long haul airline unit) recent move to withdraw services to India (Mumbai, New Delhi) and Europe (Paris, London) from Kuala Lumpur, in view of soaring taxes and higher jet fuel prices. AirAsia X said it will concentrate capacity in its core mkts of Australasia, China, Taiwan, Japan and Korea. It remains to be seen if there will be further overlapping of routes and cannibalization btwn Scoot and Tiger. Tiger trades at 9.7x P/E. FYMar12 results are due 18 May after market.