Sia Singapore Airline

Executive Summary The motif provides an oerview of the social club and its environment. The paper identifies various imagings and capabilities available to the company. The various strategies that dandy of capital of capital of capital of capital of Singapore Airlines utilise and how they affect the sky counsels performance. Key issues ask been identified that threaten Singapore Airlines current market. The often complicated Government regulations and global laws that affect the air passage constancy ready been defined and explained. Current application issues and trends that affect Singapore Airlines overhear been researched, a flake of recommendations energise been provided, as a possible solution.Overview of Singapore Airlines Singapore Airlines (SIA) first escape cocks began in 1947 partnered with Malaysian Airlines, from each one funded by in that respect regimes. The cardinal flight paths mainly advantaged South East Asia. Singapore separated from Malaysia in 1965 to run short the republic of Singapore. The two governments in that respectfore decided to go at that place own ways and set up there own skyways. In 1972 Singapore Airlines was launched. The domestic market was basically non existent due to Singapore organism a small sylvan geographically.Singapore Airlines had to immediately pursue an international presence and started planning flight routes, airport resources, and government acceptance into foreign destinations etc. SIA in any case had to establish themselves as a substantial competitor and market the airway internationally to potential customers and future stakeholders. Today, SIA has much(prenominal) than 10,000 employees and 95 aircrafts. The flight path flat serves 89 destinations around the world including Asia, Europe, North America, Middle East, Australasia, and Africa. ( www. flight paths. priceline. om) SIA is situated at Changi airport along with subsidiaries Silkair and tiger Airlines. In 2004, Ch angi Airport received a record 30,400,000 riders, a year-on-year growth of 23. 1% in passenger traffic. Similarly, a record 1,780,000 tonnes of cargo was moved, representing a year-on-year increase of 10. 2% in airfreight volume. (http//en. wikipedia. org). Changi Airport is classed as the hub of Asia, Changi provides stopovers, refuelling, and passenger exchange for all the international airlines travelling from one stead of the world to the different.Changi Airport is also blow ones stacking to confine for there cut price airline and recent Airbuses arriving in 2006. Analysis of Singapore Airlines milieu In analysing the environment, the important external influences that effect performance and decisions of Singapore airlines dedicate been detailed in this section. The airline persistence has been strongly controlled by agreements and policies. Airlines couldnt just now fly to any destination or country without appropriate authorisation. Most countries have there own na tional airline that be generally government backed and hold a big influence on there operation.The governments also implement policies and regulations to control foreign airline access to there airports. virtually countries now have deregulated there national airline industry to reduce the amount of government control, and make access to airports/services more blunt for negotiation. Countries that have employed this action are the United States, Australia, European Union and Japan. The deregulation of the Airline industry opens doors for more entrants to the market and increased competition.Singapore Airlines is still owned by the Singapore government and is still affected by such controls. The Singapore government has signed an agreement with the United States called Open Skies that gives both countries unrestricted flight access to each others countries. The open skies phenomenon is gathering momentum and more and more countries are signing up. Singapore Airlines is currently i n negotiations with Australia, to reach an agreement regarding open skies access down under. Basically the countries that gain open skies agreements are able to expand on existing business.The airline industry is extremely competitive industry and the rival airlines are always taking advantage of any opportunity to gain more destinations. Statistics see Asias population is steadily increasing every(prenominal) year and this contributes to the increase in flights. Asia is recognise as the hotspot for air travel at present and into the future. Asia-Pacific intercontinental flights are up 7% and there has been growth of 8% intra-regional services (www. oag. com). This interest in the area has seen new cut price airlines come on to cater for the make. SIA has established its own low price airline Tiger Airlines to satisfy demand.Other environmental figures influencing SIA and the airline industry are rising fuel prices. The price rise in fuel causes a toll increase in the runnin g of flights, therefore a rise in ticket prices. SIA have just passed a decision to put a US$10 surcharge on ticket prices to accommodate the fuel rise. Terrorism has ca apply massive economic losses for airline industry and also bankruptcy. Terrorism strikes go past at any time without warning and destinations around the world that are directly affected by terrorism attacks see a spectacular stop in airline flights.The airlines cannot predict these attacks from happening and have to build such occurrences into there risk management policies. Review of the Industry Structure In analysing the industry structure this report uses Porters 5 Forces. The five forces look at the Threat of New Entrants, supply of Suppliers, Power of Buyers, Availability of Substitutes, and Competitive Rivalry. Threat of New Entrants The international airline industry has high barriers to entry for a number of reasons, firstly there are quite high embodys involved in place up an industry.As mentioned pre viously, gaining flight access to foreign countries and obtaining airport space is another hurdle that stands in the way of new entrants. The current airlines dominating the industry are constantly working on maximising salute efficiency, and performance to discourage any new entrants and to try force out existing poor operators. The municipal industry is more attractive to new entrants as it doesnt have as much complications as the international side and lower barriers to entry. Power of Suppliers The aircraft suppliers of the airline industry are dominated by two suppliers Boeing and Airbus.The aircrafts engines are standardised so both aircraft manufacturers have similar engines. Boeing and Airbus both outsource there separate for there planes and generally use the same suppliers. The body frames and interiors is where the two manufacturers can differentiate there product. receivable to the standardisation of engines the switching exists of suppliers is reduced and airlines. (De Melo, 2000) Power of Buyers The power of buyers is low in the airline industry as switching costs are high. Most airlines are similar inside its more the service that sets them apart.Most airlines follow each other on prices and cause buyers to pay there price, on the other hand new entrants my cause price competition and therefore a buyers market. (www. fool. com). Availability of Substitutes The substitutes that could threaten the airline are cars, boats and trains. These substitutes are not that much of a threat to aeroplane travel. Airlines are generally is use to cover large distances in a short period of time, and was establish to fill a demand that the other forms of travel couldnt accommodate as effectively.Alternate measures of transport are more of a in the flesh(predicate) choice not a direct parallel substitute. (www. fool. com). Competitive Rivalry The airline industry is exceedingly competitive and price wars are a common occurrence. There is constant fighting fo r territory and expansion. study players in the industry concentrate on lowering there costs and improving service to disapprove new entrants. What Key resources available to Singapore Airlines? Singapore Airlines is a well establish international airline with strong profitable track record.The company has a government ownership and also private stakeholders. The airline has always been profitable and the funds reinvested back into the company, to build on capital. The table below shows that move 3 years financials and even in the case of the S. A. R. S breakout in 2004 they still posted a profit. pic Aside from just financial capital, Singapore Airlines has many other resources listed below Changi airport the home of Singapore Airlines is one of the largest freight handling facilities in the world, and is the most popular hub in Asia. Singapore has a resource of about 95 aircrafts that now are brought internally and not leased the aircrafts are generally replaced every 4-5 year s. Singapore Airlines has built a mass of 89 international flight destinations. The airline has built a human resource instruct facility. Changi Airport hosts SIA state of art engineering company that services there planes and other international airlines. SIA also has one of the largest flight kitchens in the world situated at Changi. SIA belongs to the whizz Alliance where other airlines join resources together to increase coverage around the world.Star alliance covers 790 airports in 138 countries. in conclusion the home run attribute, is probably there most powerful resource. Singapore Girl youre a outstanding way to fly Has been strongly nurtured over the last 32 years to be the most recognised brand and icon in the airline industry, Singapore Airline has many capabilities that support there resources, these are Latest technological and communication products crosstieing there global network. Huge investment in human resources, this provides highly skilled workers and management. Expansive destination coverage due to Star Alliance. State of the art freight facilities that link with the port shipping authority What it takes to be successful in the Airline Industry and What strategies are used by Singapore Airlines? Singapore Airlines is basically the trend setter of the airline industry. SIA has employed many forward-looking strategies since it began. These strategies have been supported and strengthen over the years, and have led to the success, the company enjoys today. To be successful in the airline industry you have to employ superior efficiency, quality, innovation and customer responsiveness.SIA has exercised a quality/service differentiation strategy to become one of the leaders in the passenger airline industry. Singapore Airlines has conservatively built a financial and fixed cost infrastructure which allows them to continue investing to support the brand while challenging the competition on costs. (www. venturerepublic. com) More recently Singapore Airlines became a extremity with the star alliance, which helps the company maintain economies of scale by code sharing, where SIA can offer services on another airline under its own flight codes and offer more destinations.By building solid capital the airline now enables them to purchase aircrafts and equipment internally without the compulsion for leases and interest. This has enable SIA to have the latest aircrafts and renew them every 5 years. By having a new fleet the company is able to be more expeditious with regards to fuel economy, maintenance, and have less downtime. (www. venturerepublic. com). Another benefit of owning aircrafts outright gives flexibility if there is a dramatic decline in the economy, SIA has the freedom of not world locked into long leases and aircrafts can be disposed of, if need be.Therefore they can handle the ups and downs of the economy, more so than competitors. (www. venturerepublic. com). Singapore Airlines have always c oncentrated on being innovative, as mentioned above they replace there airlines every 4-5 years taking advantage of new technology. The company has always the first to introduce new innovative ideas for example hot meals, free alcoholic and non-alcoholic drinks, resilient towels, personal recreation systems, and video on demand. SIA will also be the first to own the new Airbus Super jumbo A-380 in 2006. www. allaboutbranding. com) SIA is committed to providing a world class quality and service, the airline allocates a substantial amount of time and money into there lag information and education. The company has 4 training facilities with various programs that exercise classroom, work experience and simulation strategies. (www. trainersdirect. com) SIA has more concentration on staff training than any other airline. Singapore Airlines employees have to complete a 4 month training line of descent before they are even allowed to serve a customer.On average in 1997 Singapore Airlin es spent $5600 per staff per year on training. The emphasis on staff training is so they can provide the scoop out quality service. (www. trainersdirect. com) The branding of SIA is based on quality. SIA have the strongest brand name in the airline industry. Singapore girl youre a great way to fly has been there brand of quality for the last 32 years. The icon has become so strong that Madame Tussauds Museum in London started to display the Singapore Girl in 1994 as the first commercial figure ever. (www. venturerepublic. com).The airline provides the best on flight cuisine including fine wines, and cocktails. Complimentary gifts are received on each level of passenger class. SIA have maintained a policy that once a passenger pays for there ticket there is no more to pay. (www. venturerepublic. com). Some airlines in tough economic times have started to charge for in-flight drinks and entertainment where SIA havent. This commitment to quality has won the airline numerous internatio nal awards and differentiated themselves from other airlines. Some issues facing Singapore AirlinesThe Airline has purchased a number of the new Airbus Super jumbo A-380, which could be a bit premature due to the fact they are still in negotiations with the Australian government over open skies. The Australian government holds the key to Singapore gaining open skies agreements, if an agreement is reached Singapore will be able expand and benefit from long haul flights between Australia and United States. On the flip side the introduction of the new airbuses into the industry will cause less demand on Singapore as a stop-over, refuelling hub.Airlines that adopt the new airbuses will be able to bypass previous stopovers and enjoy cost savings. As explained earlier there has been a dramatic increase in demand for inter-Asia flights. Rival players have noticed the increase in demand and have implemented there own low cost airlines. E. g. Australias Jet Star. Recommendations and Justific ations Singapore Airlines conduct a very professional business they have a strong brand, strong human resources and management, advanced facilities and a proven track record as being one of the top airlines for the last 20 years. I recommend The airline pursue open skies agreements to expand there destinations. Establish the long haul routes with the new Airbus technology before rival airlines purchase the aircrafts. conceal strong emphasis on the brand name and quality of service. Utilise some of the success factor from SIA on the new low-cost airline to compete with new rival competitors establishing themselves in the Asian market. campaign Changi Airports engineering and freight facilities to the new inter-Asian airlines as long haul flights maybe bypassing Singapores Changi Airport in the future. Stay with the competitive advantage outlined above, using the differentiation strategy. Maintain the innovation and complimentary products. Help support the Star Alliance to im prove customer satisfaction. It is very hard to recommend a lot of strategies for Singapore airlines to undertake, as they have been leaders in the industry for so long and have developed award winning strategies that have made them very successful. This report has been constructed from a wide take off of research that has complemented Singapore Airlines various approaches to conducting business.