Will budget conscious Scoot travellers pay more for SIA's new sustainable travel initiative?

Travellers will soon have the option to pay more for their flights on Singapore Airlines, and its budget carrier Scoot to reduce carbon footprints.

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 first announced in November 2021 as part of a CAAS-SIA-Temasek pilot to advance the use of sustainable aviation fuel in Singapore.

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

The launch of the SAF credits provides customers including corporate and individual travellers, and freight forwarders an avenue to do their part for the environment, and reduce their carbon footprint.

SIA’s corporate customers and freight forwarders can purchase the SAF credits directly from SIA, and freight forwarders can in turn also sell the credits to their downstream clients to reduce carbon emissions from their business operations. Lee Wen Fen, SVP of corporate planning, Singapore Airlines, said, “As we progress with the SAF pilot in Singapore, we can now offer more opportunities for our corporate customers and travellers to mitigate their carbon emissions using SAF credits, which are registered and accounted for within the RSB Book & Claim System.”

“This will help to accelerate and scale up the collective adoption of SAF, reinforcing our commitment to achieve 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, as part of the SIA Group Voluntary Carbon Offset Programme. SIA will also partner Climate Impact X (CIX), a global exchange for quality carbon credits, to introduce a bundled portfolio consisting of SAF credits and carbon credits. The product will be designed to meet corporate demand for SAF while balancing affordability. 

According to reports on CNA, the one-year trial will see all SIA and Scoot flights flying out of Changi Airport using a blend of refined jet fuel and neat SAF. Neat SAF are sustainable fuels that are unmixed or undiluted.

The initiative marks a move for SIA in the right direction with more consumers today conscious about sustainability initiatives. Recently, Booking.com  released its 7th annual travel sustainability report, unveiling that 86% of interviewees agreeing that sustainability is important to travelers and 56% stating that news regarding global warming has prompted their eagerness to travel sustainably. The report garners opinions from over 30,000 tourists from 32 markets, with many choosing “earth before everything else”, as well as continuing the search of sustainable brands to ensure a meaningful journey.

With the increasing awareness of global warming, the latest research results revealed that travel sustainability is going to be a trend instead of limiting to a few tourists, which more and more tourists are wishing to make cautious and conscious decisions from transport to consumer methods, according to the report.

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

According to a Bain & Company study, developing Asia Pacific markets have a greater "say-do" gap, which means that the percentage of customers claiming to buy sustainable products is bigger than that of those buying such products. The study said that while APAC consumers care more about sustainability now and are willing to spend more, but their actions fall short. For example in the packaged goods industry, the report said that among consumers in China, 54% ranked sustainability as one of the top-five key purchasing criteria, yet sustainable products comprised only 12% of the market share in packaged foods. In Vietnam, the gap is 41% to 3%. On the contrary, in mature markets such as Singapore, the gap was only 23% to 14%.

Meanwhile according to marketing consultants R3, currently millennial are the audience most likely to pay for sustainability led products and most likely willing to make the change. Overall, the communications around marketing also has to evolve, said a report titled “Marketing Sustainability in An Inflation Economy” published by R3 last month.

In a conversation with MARKETING-INTERACTIVE, a former aviation industry marketer shared that sustainability and climate-related topics are highly regarded as needs in the more developed region of the world, but it is still considered secondary in many parts of Southeast Asia (as opposed to basic survivability).

As such, it might be challenging to gain traction among budget-conscious travellers in this region that look at low cost carriers as a form of "getting there" before the actual trip starts.

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

In educating Scoot consumers, he shared that the brand has gained a reputation in selling aspirational travels with a tongue-in-cheek tonality, gaining trust from its target audience by staying relatable. This should not change when communicating such a raw concept.

“Scoot can launch a fanciful educational campaign that speaks about SAF and how everyone can be a part of this journey. Scoot's fans also tend to be more vocal whenever there is an opportunity for them to do something good - this can be an opportunity to leverage such collective spirit to push forth the initiative,” he shared, adding:

Based on track record, I believe Scoot is able to convince their target audience through their thematic campaigns.

Echoing similar sentiments is Joanna Ong-Ash, founder of Bravery Communications and an advocate in the sustainability space. Ong-Ash was of the view that be it SIA or Scoot, consumers today are only now slowly going back to travel, and they are still conscious about the prices due to rising travel expenses.

“Regular consumers are unlikely to jump on the initiative immediately as many are still adjusting to the increased cost of travel with markets opening up. Where it is likely to take off is from the corporates who now need to walk the talk and not pay lip service to the issues around sustainability,” said Ong-Ash. 

She added that many travellers do see travelling as simply a mode of carrying them to their destination, where generally carbon footprint isn’t at the top of their mind.

Specifically for Scoot, Ong-Ash added that the airline is widely regarded as one created for the impulse traveller in mind, and naturally its demographic will then be the traveller looking to stretch their dollar.

In making the initiative work, Ong-Ash added that more education needs to be done at the grass root everyday level. “There needs to be the shared value of responsibility around sustainability of individual and corporates to keep the environment green. It all starts with basic education, and companies must lead the way in sharing how they are playing their part in investing in green ways,” she said.

Once corporates start making those notable strides, this will trickle down to the individual.

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

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