What the Scoot-Tigerair brand merger could bring

It could help improve capacity management.

The Scoot-Tigerair brand merger could help improve capacity management for the two airlines, OCBC Investment Research said.

Quoting CAPA Centre for Aviation, the brokerage firm said Scoot and Tigerair Singapore currently operate a combined fleet of 37 aircraft flying to 60 destinations, with plans to expand to 40 aircraft and more than 60 destinations by end-FY18.

By July 25 this year, the entire Scoot fleet would have been transferred over to Tigerair air operator certificate (AOC), which allows Budget Aviation Holdings (BAH) to change gauge more flexibly (change of aircraft while retaining same flight number) within their network.

"Not all countries allow slot transfers/trading between two airlines, which means if Scoot and Tigerair are operating under separate AOCs, changing to a bigger B787s (Scoot) or smaller A320s/A319s (Tigerair) to increase or decrease capacity on certain routes to optimise capacity management will not be possible," OCBC Investment Research said.

It added, "However, post-integration, with Scoot and Tigerair operating a single AOC, BAH will be able to optimise capacity with increased flexibility to change the type of aircraft used on different routes. Integration could also help in improving connectivity between the two brands, thereby increasing interlining traffic."