Scoot to push 5% fare increase amidst fuel price hike

Fares will inch up between $5 and $30 depending on flight duration starting September.

Scoot targets to increase its fares by about 5% on average amongst its network due to the 40% YoY surge of fuel prices to US$90 per barrel on average, an announcement revealed.

The budget airline said that fares will inch up between $5 and $30 per sector, depending on flight duration started September.

Also read: Changi Airport fee hikes could be worse for budget airlines

Scoot erased fuel surcharges from their fare structures back in March 2016 with fuel prices sinking to six-year lows.

“Besides increasing fares, Scoot is also looking at containing its costs,” the airline said. “Some initiatives being considered include exploring ways to reduce fuel burn, review of suppliers’ contracts and measures to improve productivity and keep manpower resources lean, amongst others.”

Earlier, Maybank Kim Eng analyst Mohshin Aziz said that the Changi Airport fee hikes could also take its toll on low-cost carriers (LCCs) including Scoot, as they take about five years to recover from declining passenger traffics, compared to the two to three years recovery for full service carriers (FSCs).

“Airfares are generally a function of demand and supply as well as macroeconomic conditions, of which Changi’s fee hikes make up just one of several factors,” a Scoot spokesperson told Singapore Business Review. “Our bookings are holding up still, and we remain committed to strengthening our product and service proposition to retain our competitive advantage.”