Further bad news on Tiger Airways – its Australian operations lost $20.5m in the 2nd quarter – combined with the launch of no-frills carrier Scoot by part-owner Singapore Airways prompts a subversive thought. Is SQ launching Scoot as insurance for the damaged Tiger?

The scenario could be if Tiger continues to fail , its Australian operation is shut down and Scoot – a clean new brand 100% owned by one of the world’s most admired airlines – fills the void in a market that Singapore Airlines has long coveted.

Makes a nice conspiracy theory don’t you think. But it also makes sense because there’s now no question that the Tiger Airways brand is damaged beyond repair in Australia.

Tiger, which has lost $110m since setting up in Australia four years ago, will always carry the taint of failure and the poor management that saw its fleet grounded for six weeks by the Civil Aviation Safety Authority, leading to the recent heavy loss.

Word of mouth is awful. At the Destination Online conference in Cairns last Friday a delegate was asked to match the images of celebrities with airlines.

When prompted on Tiger he threw the question on its head and said: “Who cares, no-one wants to fly Tiger anyway”.

And right now, few can. The carrier is restricted to flying just 22 sector flights a day, which will shortly rise to 32.

Local boss Chin Yau Seng says Tiger will not be able to make money until it is flying at least 60 sectors a day.

Meanwhile, Tiger Airways is also losing money in its Asian heartland.

According to smh.com.au, Singaporean parent company Tiger Airways Holdings lost S$50m in the three months to September 30 compared with a S$14m profit for the same period in 2010.

That’s not just a bad look for Tiger but also a loss of face for Singapore Airlines, the proud flagship of a small nation that takes great pride in fighting above its weight economically.

So what of Scoot?

It’s a new no-frills carrier 100% owned by SQ that will start flying in mid-2012 with a fleet of four B777-200 aircraft bought from Singapore Airlines.

The initial focus is on medium to long haul routes between Singapore and destinations including Australasia and China.

Pricing will be up to “40% less than legacy carriers” and Scoot will operate from Changi Airport Terminal 2 in Singapore.

For now, anyway.

Ends.

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