Will budget-conscious Scoot travelers pay more for SIA’s new sustainable travel initiative?


Travelers will soon be able to pay more for their flights on Singapore Airlines, and its budget carrier Scoot to reduce carbon footprint.

This comes as the Civil Aviation Authority of Singapore (CAAS), Singapore Airlines (SIA) and Temasek launch the sale of Sustainable Aviation Fuel (SAF) credits in July 2022. The SAF credits were announced for the first time in November 2021 as part of a CAAS-SIA-Temasek Pilot Project to advance the use of sustainable aviation fuel in Singapore.

A total of 1,000 SAF credits will be available for sale and each credit purchased will help reduce 2.5 tonnes of carbon dioxide emissions, CAAS said in a statement.

The launch of SAF Credits offers customers, including business and individual travelers and freight forwarders, a way to do their part for the environment and reduce their carbon footprint.

SIA’s corporate clients and freight forwarders can purchase the SAF credits directly from SIA, and freight forwarders can in turn sell the credits to their downstream customers to reduce carbon emissions from their business operations. Lee Wen Fen, Senior Vice President of Corporate Planning, Singapore Airlines, said, “As we move forward with the SAF pilot project in Singapore, we can now offer more opportunities to our corporate customers. and travelers to mitigate their carbon emissions using SAF credits, which are recorded and accounted for in the RSB Book & Claim System.

“This will help accelerate and scale collective adoption of SAF, reinforcing our commitment to achieving net zero carbon emissions by 2050,” Lee added.

From the fourth quarter of 2022, all SIA customers will be able to purchase a mix of SAF credits and carbon offsets, under the SIA Group voluntary carbon offset program. SIA will also partner with Climate Impact X (CIX), a global premium carbon credit exchange, to introduce a pooled portfolio of SAF credits and carbon credits. The product will be designed to meet enterprise demand for SAF while balancing affordability.

According to reports on CNA, the one-year trial will see all SIA and Scoot flights take off from Changi Airport using a mixture of refined jet fuel and pure SAF. Pure SAFs are unblended or undiluted sustainable fuels.

The initiative marks a step for SIA in the right direction with more consumers today becoming aware of sustainability initiatives. Recently, Booking.com released its 7th annual Travel Sustainability Report, revealing that 86% of respondents agree sustainability is important to travelers and 56% say news about global warming has prompted them to travel from sustainable way. The report collects the opinions of more than 30,000 tourists from 32 markets, many of whom choose ‘land first’, while continuing to search for sustainable brands to ensure a meaningful trip.

With the growing awareness of global warming, the latest research findings have revealed that sustainability in travel is going to be a trend instead of being confined to a few tourists, that more and more tourists want to make careful and conscious decisions about the transportation to consumption methods, according to the report.

Still, with budget-conscious consumers being a demographic largely associated with SIA’s Scoot brand, the question remains whether or not they’ll loosen their purse strings to pay more for a sustainable option.

According to a study by Bain & Company, developing Asia-Pacific markets have a greater say-do gap, meaning that the percentage of customers who say they buy sustainable products is higher than those who buy such products. The study indicates that even though APAC consumers care more about sustainability and are willing to spend more, their actions are failing. For example, in the packaged goods industry, the report indicates that among Chinese consumers, 54% rank sustainability among the top five purchasing criteria, while sustainable products account for only 12% of the market share of packaged foods. In Vietnam, the gap is 41% to 3%. On the contrary, in mature markets like Singapore, the gap was only 23% to 14%.

Meanwhile, according to marketing consultants R3, millennials are currently the most likely audience to pay for sustainability-focused products and the most likely to make the switch. Overall, communications around marketing also need to evolve, according to a report titled “Marketing Sustainability in An Inflation Economy” published by R3 last month.

sustainable millennial

In a conversation with INTERACTIVE-MARKETINGa former aviation industry marketer says sustainability and climate-related topics are highly regarded as needs in the world’s most developed region, but are still seen as secondary in many parts of the world Southeast Asia (as opposed to basic survivability).

As such, it could be difficult to gain traction among budget-conscious travelers to this region who see low-cost carriers as a form of “surrendering” before travel begins.

“There will be a segment of travelers who will be more concerned with this topic and will be willing to pay for it, but it will also depend on how the topic is communicated to them,” he said.

By educating Scoot consumers, he explained that the brand had gained a reputation for selling ambitious travel with a wry tone, earning the trust of its target audience by remaining approachable. This should not change when communicating such a raw concept.

“Scoot can launch a whimsical educational campaign that talks about SAF and how everyone can be part of this journey. Scoot fans also tend to speak out more whenever they have the opportunity to do something well – this can be an opportunity to leverage that collective spirit to move the initiative forward,” he shared, adding:

Based on its track record, I think Scoot is able to win over its target audience through its themed campaigns.

Joanna Ong-Ash, founder of Bravery Communications and sustainability activist, echoes similar sentiments. Ong-Ash opined that whether it’s SIA or Scoot, today’s consumers are only slowly getting back to traveling again and they are still price conscious due to rising travel costs. .

“Regular consumers are unlikely to jump on the bandwagon immediately, as many are still adjusting to the rising cost of travel as markets open up. Where it is likely to take off is with companies now having to lead by example and not pretend to talk about sustainability issues,” Ong-Ash said.

She added that many travelers see travel as just a way to get them to their destination, where the carbon footprint is usually not their priority.

Specifically for Scoot, Ong-Ash added that the airline is widely seen as an airline created with the impulsive traveler in mind, and naturally its demographics will then be the traveler looking to stretch their dollar.

To make the initiative work, Ong-Ash added that more education needs to be done at the grassroots, day-to-day level. “There must be a shared value of responsibility around the sustainability of individuals and companies to keep the environment green. It all starts with basic education, and companies must lead the way by sharing how they play their part in investing in greenways,” she said.

Once companies start making these noticeable advances, it will trickle down to the individual.

“We have to co-create; define a goal and articulate a right. All of these make up the communications strategy to make a difference in consumer education for any brand,” she shared.

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