SINGAPORE (May 20): According to CAPA — Centre for Aviation, the recent creation of Budget Aviation Holdings has brought Singapore Airlines (SIA) one step closer to merging LCCs Scoot and Tigerair, paving the way for a smooth integration.

On Wednesday, SIA announced the establishment of Budget Aviation Holdings, the new holding company for Scoot and Tigerair, to facilitate the further integration and sharing of functions such as sales, marketing, IT, planning and operations.

While the two airlines remain separate with their own operator certificates, a new joint management team will be led by Budget Aviation Holdings CEO and CCO, Lee Lik Hsin and Leslie Thng respectively.

 “A merger is likely to eventuate but is difficult to implement at this juncture,” says CAPA on Thursday, citing potential overcapacity as one of the challenges to overcome.

However, it highlights that the anticipated rebranding of Tigerair Australia by Virgin Australia and Tigerair Taiwan by China Airlines “should make it easier for the SIA Group to transition to a single LCC brand, with Scoot the likely surviving brand”.

As at 11:55am, SIA traded 1.13% higher at US$10.73.