Narrowbody deliveries help Scoot make progress on fleet renewal goals
While many airlines in the Asia-Pacific region paused aircraft deliveries during the pandemic, some of the strongest LCCs continued to receive new narrowbodies and are now further advanced on their fleet modernisation efforts.
Singapore's Scoot is a good example of an airline that has kept taking new aircraft deliveries. This has allowed the airline to move within sight of its goal of replacing its remaining Airbus A320ceos with A320neo-family aircraft.
Other examples of LCCs that did not halt deliveries during the pandemic include Philippines-based Cebu Pacific and India's IndiGo.
In each case, the airline's new aircraft streams have given them greater options in terms of fleet refresh and capacity rebound.
This will put them in a better position to take advantage of the post-pandemic period.
Summary:
- Scoot aims to switch to an all-A320neo-family narrowbody fleet by the end of 2025.
- Overall Scoot fleet total is up by six from before the pandemic, with another 23 on order.
- The LCC is nearing pre-pandemic capacity levels, and plans to exceed them this year (in 2023).
- China was previously Scoot's top country market, so reopening will boost growth prospects.
- Cebu and IndiGo have also continued to refresh their fleets and rebuild capacity.
Scoot eyes medium term completion of narrowbody fleet transition
Scoot plans to retire the last of its Airbus A320ceos by the end of 2025, said the airline's CEO Leslie Thng during a media roundtable organised by the Singapore Airshow.
So by early 2026 Scoot will have a fleet comprising all new-generation aircraft, including A320neo-family narrowbodies and Boeing 787s.
As the older aircraft exit, new ones are arriving. The replacement process continued during the COVID pandemic years, although there were some timetable tweaks.
Scoot is "on track" to meet its aircraft delivery targets for 2023, Mr Thng said.
Scoot currently has six more aircraft in its combined fleet than it had in Mar-2020, before the COVID-19 pandemic, he said. The average fleet age is 6.5 years - well below the international and Asia-Pacific averages.
According to the CAPA fleet database, Scoot has a total of 59 aircraft, including 12 inactive.
The total comprises 24 A320ceos, six A320neos, nine A321neos, 10 Boeing 787-8s, and 10 Boeing 787-9s.
Ten of the A320ceos and two of the 787-8s are inactive.
The airline has 23 aircraft on order: 12 A320neos, six A321neos, three Boeing 787-8s and two Boeing 787-9s.
The chart below indicates that most of the orders are due to be delivered in 2023.
Scoot: projected aircraft deliveries, as of 14-Feb-2023
IndiGo and Cebu Pacific have also kept fleet upgrades largely on track
India's IndiGo and the Philippines' Cebu Pacific are also both making good progress on their fleet modernisation and capacity recovery strategies.
IndiGo did not defer its narrowbody deliveries throughout the pandemic, although it did switch its focus - temporarily at least - from fleet growth to renewal.
The airline now has about 200 A320neo-family aircraft in service, with just 20 A320ceos remaining, according to CAPA's fleet database.
IndiGo has an average fleet age of just 3.2 years.
The LCC has about 500 more A320neo-family aircraft on order and is projected to receive 42 of these in 2023.
Cebu Pacific has 19 A320neo-family aircraft in service and 27 A320ceo-family aircraft.
It has 33 more Airbus narrowbodies on order, and expects to receive six of these this year (in 2023).
Cebu Pacific has an average fleet age of 5.5 years.
Cebu Pacific expects to reach pre-pandemic capacity levels by the end of Mar-2023, and IndiGo has been tracking well ahead of 2019 levels for some time.
Scoot capacity levels will soon exceed pre-pandemic levels
Scoot's recent and planned deliveries are sufficient for the airline to meet its capacity growth needs, Mr Thng noted.
Scoot's current staff resources are also adequate for its requirements, and despite a tight labour market, its recruitment efforts are on track to cover its planned ramp-up.
The airline's capacity reached 80% of pre-pandemic levels in Dec-2022, said Mr Thng; Scoot intends to complete the recovery and go beyond pre-COVID capacity levels this year (in 2023).
Data from CAPA and OAG shows that Scoot's capacity recovered steadily through 2022.
For the week of 13-Feb-2023, the airline's weekly seats reached 93.7% of the level from the same week in 2019.
Scoot has reached approximately 82% of the level from 27-Jan-2020, which was just before the COVID pandemic caused a capacity drop.
Scoot: system capacity for week of 13-Feb-2023, as measured in weekly seats (capacity variation shown for 2019-2023)
One significant change since the pandemic began is that Scoot and its parent Singapore Airlines have picked up many of the routes vacated by their fellow SIA Group member SilkAir, which has been closed down.
In comparison to its LCC subsidiary, Singapore Airlines' system capacity had recovered to 91% of 2019 levels for the week of 13-Feb-2023.
Both SIA and Scoot are ahead of the overall Asia-Pacific system average, which is 86%.
China reopening will help spur next phase of Scoot's capacity recovery
In general, Scoot expects improvement to continue in 2023.
Forward bookings remain strong, despite rising interest rates and the looming threat of recession, Mr Thng said.
Demand should still be robust through this year (in 2023), he added.
For Scoot - as with many other Asia-Pacific airlines - the recent relaxation of many of China's travel restrictions and the progressive reopening of this market will be a key factor.
This will give the airline more opportunities to scale up operations, noted Mr Thng.
China was an important part of the Scoot network before the pandemic - however, the airline was only able to reinstate 10% of its pre-COVID operations in that market in 2022, said Mr Thng.
For the week of 13-Feb-2023, Scoot was operating 15.4% of the weekly seats to China it was offering in the same week in 2019, according to data from CAPA and OAG.
The table below shows the airline's top seven country markets for 6-Jan-2020, before the pandemic hit.
Singapore-China led this list by a comfortable margin, which highlights the potential gains that Scoot can make there.
Scoot: top country markets, as measured in seats for the week of 6-Jan-2020
Airlines in healthier condition before the pandemic were better placed to continue fleet upgrades
Continuing to take aircraft deliveries during the pandemic years has obviously benefitted certain LCCs.
However, this was not a choice available for other airlines that faced a struggle for survival.
Scoot, Cebu and IndiGo were in relatively stronger financial positions compared with most of their Asia-Pacific LCC peers, so were better able to continue fleet upgrades. Scoot still has a few years to go before it completely transitions its narrowbody fleet to A320neo-family aircraft.
However, in the interim its fleet mix will increasingly shift towards these newer, more efficient aircraft.
Of course, Scoot has the added advantage of being part of the powerful and well-resourced SIA Group. It is increasingly clear that Scoot will play a growing role in the group's network and fleet strategy in coming years.
The likely ramp-up of China services in 2023 will give the LCC impetus to push its capacity beyond pre-COVID levels.