Look out for a Tiger-Scoot tag team in Australia

Tiger Airways' growing presence there may lead to a strategic tie-up with newcomer Scoot.

Both airlines, which belong to the same Singapore Airlines parent umbrella, could soon be "collaborating for traffic feed into each other's network," among other synergistic schemes.

Here's more from PhillipCapital:

Tiger Airways announced plans to setup a 2nd base in Sydney, with operations expected to commence from early July 2012. Sector limits imposed by CASA would also be gradually lifted and Tiger Airways Australia (TAA) would be able to operate to a max of 64 (current: 38) sectors per day from Oct 2012. Previously, SIA also announced an increase in fuel surcharge of US$2-28 per sector for flights on SIA &
SilkAir and SIA Cargo’s freighter capacity would be reduced by 20% in response to weaker demand.
How do we view this?

The developments are positive for Tiger Airways. We also think that the establishment of a 2nd base by TAA in Sydney could have strategic implications to SIA’s new long haul budget carrier, Scoot. Scoot previously announced that they would fly to Gold Coast & Sydney from mid 2012. Hence, we believe
that there is potential for development of a budget network for SIA & its affiliates, with Tiger Airways and Scoot collaborating for traffic feed into each other’s network in Australia.

The codesharing scheme between SIA and Virgin Australia would provide the full service network alternative for the less budget conscious travelers.

The increase in fuel surcharge is a necessary move to combat the current high Jetfuel prices (c.US$135/bbl, +10.7% YTD) and is the 5th round of increase since Dec 2010. As the announced freighter capacity reduction of 20% does not involve the bellyhold capacity in SIA’s passenger fleet, we reckon that the effective cargo capacity reduction would probably be half. Cargo yields could be protected with the capacity reduction. With the dynamic nature of the cargo business, we believe that a quick restoration of cargo capacity is possible, if demand unexpectedly strengthens

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