Singapore Airlines' new budget carrier Scoot has announced that its first route will be between Singapore and Sydney.

The new low-cost offshoot of Singapore Airlines has plans to start daily services on the Singapore-Sydney route from sometime in the middle of 2012.

Scoot will operate from Terminal 2 of Changi Airport and will offer two cabin classes. But, the number of seats is yet to be announced.

In the beginning, Scoot will have a fleet of four Boeing 777 planes, which it will buy from its parent company, Singapore Airlines. However, the number of planes will be increased to a total of 14 by the year of 2015.

The medium to long-haul airline, which will pose a direct challenge to Jetstar and Qantas, is also mulling over plans to widen its reach into Australia by flying to more destinations like Melbourne.

It new carrier also named New Zealand, North Asia, India, Europe and the Gulf states as its potential destinations. In the Gulf States, it will have to face competition from existing carrier like Emirates and Etihad.