Sydney first destination for Singapore Airlines' new budget carrier

Singapore Airlines' new low-cost offshoot, Scoot, has laid a direct challenge to Qantas and Jetstar on home soil after revealing that its first route will be between Sydney and Singapore.

Scoot will begin daily services on the route from the middle of next year, and said today that it would consider widening its reach into Australia with the possibility of it flying to destinations such as Melbourne.

The medium to long-haul airline will start with a fleet of four Boeing 777s, which it is buying from from its parent, Singapore Airlines, and plans to increase it to 14 by 2015.

The launch of another low-cost airline is a direct threat to Jetstar and Malaysia's long-haul airline AirAsia X, in which the entrepreneur Sir Richard Branson has a stake.

Scoot has also gained first-mover advantage against AirAsia X, which has long sought to fly between Sydney and Kuala Lumpur at least twice a day but has been prevented from doing so by the Malaysian government, which has a 69 per cent stake in Malaysia Airlines. The latter flies between Sydney and Kuala Lumpur.

Apart from Australia, Scoot has named as potential destinations New Zealand, North Asia, Europe, India and the Gulf states, where Emirates and Etihad are based.

The airline will operate from Changi Airport's Terminal 2 and will offer two cabin classes, though the specifics of seats are yet to be revealed.

Scoots's chief executive, Campbell Wilson, said the airline was "unabashedly no-frills" and its fares would be about 40 per cent cheaper than those offered by typical premium airlines.

Singapore Airlines also has a cornerstone stake in Tiger Airways, which was grounded by air-safety regulators for more than a month earlier this year due to safety concerns.


But Mr Wilson sought to distance Scoot from Tiger, telling reporters in Sydney today that "we will be a very different animal".

Asked what competitive response he expected from Jetstar, Mr Wilson said: "I would presume that they would welcome additional competition – competition keeps us all honest".

The NSW Premier, Barry O'Farrell, said the influx of tourists on the daily flights would inject about $150 million a year into the state's economy.

Scoot said it expected a 50-50 mix of Australians and inbound tourists to fly on its first route.

Singapore Airlines also received final approval today from Australia's competition regulator for an alliance with Virgin Australia.