Will Scoot bite into Tiger Airways' market share?

Upstart carrier announces S$88 Singapore-Bangkok fares that may well steal steal passengers from its pricier sibling.

Singapore-Bangkok flights now cost roughly S$200 via Tiger Airways -- or almost twice the price of Scoot's -- and will lead to "some cannablisation" between the two SIA Group airlines, according to DBS. Why is SIA Group willing to risk this overlap effect?

Here's more from DBS Vickers:

Scoot, the medium to long haul LCC business of SIA Group, announced yesterday that it will be offering flights to Bangkok from Singapore and vice versa. This is to provide Scoot's customers connectivity between Bangkok and the Australian cities of Sydney and Gold Coast, the first two destinations announced by Scoot (with flights beginning from 4 June).

Although the connectivity makes sense, and Singapore-Bangkok is amongst the top 30 city pair routes globally, it will mean that SIA will have 3 brands in one market (Singapore Airlines, Tiger Airways and now Scoot), which also means that some cannibalization is inevitable. With an initial promotional fare of S$88, the more obvious impact would be on Tiger Airways, whose normal Singapore-Bangkok tickets cost around S$200 or so. We do not see Scoot's move to offer flights to Bangkok as a change in strategy to compete in the short haul LCC market, but rather as an'exception to the rule' to offer connectivity between Bangkok and Australia via Singapore. Hence, while some cannibalisation may occur on this particular route, we should see far less overlap on other routes for the various brands within the SIA Group stable.

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