Scoot pursues further 787 fleet growth but consolidates long-haul network

Singapore Airlines (SIA) low cost subsidiary Scoot has committed to acquiring two additional Boeing 787-8s but is taking a cautious approach to expansion of its long-haul network.


Summary:

  • Scoot has committed to two additional 787s, resulting in a widebody fleet of 22 aircraft by the end of 2020;
  • The additional 787s will likely be configured for long-haul operations, growing its sub-fleet of long-haul configured 787-8s to six aircraft;
  • Scoot’s long-haul network now includes Athens, Berlin and Honolulu, but Honolulu is being dropped in May-2019;
  • Scoot is adding capacity to Berlin next summer and may also add capacity to Athens as it takes a conservative approach to expanding its European network.

Scoot has three long-haul destinations, all of which it has launched over the last 18 months using four long-haul configured 329-seat 787-8s. Athens was launched in Jun-2017 followed by Honolulu in Dec-2017 and Berlin in Jun-2018.

However, Scoot announced on 22-Nov-2018 the suspension of Honolulu in late May-2019 due to “weak demand”. Honolulu is served four times weekly via Osaka. While both the Singapore-Osaka and Osaka-Honolulu sectors do not technically need the long-haul configured 787-8s, which are equipped with crew bunks, Scoot has counted Honolulu as one of three long-haul destinations and has been using the 329-seat 787-8s on this route.

Scoot took delivery of four 329-seat (311 economy and 18 business) crew bunk equipped 787-8s in 2017. The airline also has six older 335-seat (314 economy and 21 business) 787-8s that are not equipped with crew bunks and therefore not used on long-haul routes. Scoot also has eight 375-seat (35 business and 340 economy) 787-9s that do not have crew bunks. Scoot is slated to receive two more 375-seat 787-9s in 2019, which completes its original order for 20 787s.

SIA in Oct-2018 converted two of its 787-10 orders to 787-8s and allocated them to Scoot. These aircraft are slated to be delivered in 2020 and will likely be configured for long-haul operations with 329 seats.

CHART – Scoot’s current fleet consists of 18 787s along with 27 A320 family aircraft but three of the 787s are temporarily grounded due to Rolls-Royce engine issuesSource: CAPA – Fleet Database (as of 26-Nov-2018)

Scoot CEO Lee Lik Hsin says the airline needs more than four long-haul configured 787s, which indicates that Scoot will likely expand its European network by 2020. However, at the moment Scoot is focusing on consolidating its long-haul operation.

In addition to suspending Honolulu, the consolidation phase includes increasing frequencies to Berlin and potentially Athens. Scoot recently loaded a fifth weekly frequency to Berlin for the 2019 peak summer period (June through September) and has been looking at a possible increase to Athens.

In its first year of serving Berlin, Scoot is offering four frequencies for 10 months and three frequencies during two off-peak months. Athens is currently served with four weekly flights in peak summer months (June through September), two weekly flights in October through March and three weekly flights in April and May.

Scoot has not entirely ruled out launching a third European destination in 2019 but Mr Lee says “it should not come as a surprise if we take a bit of a breather and consolidate what we have”. He pointed out that growing frequencies to its existing European destinations would improve the efficiency of its long-haul operation. “From a network perspective we want to consolidate,” Mr Lee adds. “Long-haul isn’t easy.” (These comments were made a few weeks prior to the Honolulu suspension announcement.)

While Scoot is focused primarily on narrowbody expansion as part of an ambitious plan to double its fleet in five years (from late 2016 to late 2021), the airline plans to continue adding widebodies at a rate of “broadly” two per year. “We will be looking at a combination of -8s and -9s,” Mr Lee says. “We are not looking at -10s.”

Mr Lee explains that while Scoot has not placed its own order for additional 787s SIA “took into account our needs” when ordering 19 additional 787-10s in 2017. The 2017 order lifted SIA’s 787-10 orderbook to 49 aircraft, seven of which have already been delivered, when including an initial 30 aircraft that were ordered in 2013. Boeing will likely end up delivering SIA 40 to 45 787-10s with the balance ending up at Scoot as 787-8s and 787-9s.