Singapore Airlines

BEING DIFFERENT

GROUP 10

Singapore Airlines
Parent Company- Temasek Holdings(56% Share)
CEO- Goh Choon Phong
Hub- Changi Airport,Singapore
Alliance- Star Alliance(since 2000)
Employees- 17,000+
Fleet Size- 109
Destinations- 62

Early Days

Founded as Malayan Airways Limited in 1947

First commercial flight- Airspeed Consul from Singapore Kallang Airport to
Kuala Lampur,Ipoh and Penang
Larger capacity DC-3 introduced, providing faster and more comfortable
flights
Extension of services to Indonesia, Burma, North Borneo and Sarawak

1950s and 1960s

16 Sept.,1963 Federation of Malaysia is born and the Airline changes its

name to Malaysian Airways Limited
May,1966- Malaysian Singapore Airlines(MSA) is coined
1968- Annual Revenue touches S$100 million mark
3 B707s and 5 B737-100s added to fleet

1970s and 1980s

2 June, 1971- MSAs first transcontinental flight took off for London
1972- MSA splits into Singapore Airlines and Malaysian Airline System
Fleet expanded to include B747s, B727s and DC-10s
Singapore Airport Terminal Services(SATS) set up to provide efficient ground
services
SilkAir(subsidiary of Singapore Airlines) opens up as Tradewinds

1990s

22 Nov.,1990- Commenced operations from the New Terminal 2 at Singapore

Changi Airport
1998- Set new standards in air travel by unveiling a new suite of products
and services worth S$500 million
1999- Launch of KrisFlyer, its first proprietary frequent flyer programme

2000s

Set record for the worlds longest non-stop commercial flight from Singapore
to Los Angeles in Feb.,2004 and later bettered it by launching a flight from
Singapore to New York
15 Oct.,2007- SIA took delivery of worlds first A380
May 2008- SIA became first carrier to operate an all-Business Class service
between Asia and USA

SIA Subsidiaries
The Singapore Airlines Group has over 20 subsidiaries, covering a range of
airline-related services from cargo to engine overhaul
Some of the main subsidiaries are
SIA Cargo

SIA Strategy
A GREAT WAY TO FLY

Porter Competitive Model

Aircraft Manufacturers
Aircraft Leasing Companies
Labor Unions
Food Service Companies
Fuel Companies
Airports
Local Transportation Service
FAA
Hotels

Bargaining
Power
of Suppliers

Potential
New Entrants

Foreign Carriers
Regional Carrier Start ups
Cargo Carrier Business Strategy Change

Intra-Industry Rivalry
SBU: Singapore Airlines
Rivals: JAPAN AIRLINES
MALAYSIAN AIRLINE SYSTEM BERHAD
Cathay Pacific Airways Limited

Alternate Travel Services

Fast Trains
Boats
Private Transportation
Videoconferencing
Groupware

Substitute
Products
and Services

Bargaining
Power of Buyers
Travel Agents
Business Travelers
Federal Government
Pleasure Travelers
Charter Service
U.S. Military
Cargo and Mail

Business Strategy Model - Airline Industry

Scheduled
Passengers

PRODUCT/SERVICES
Charter
Cargo
Services

Mail
Air Express

MARKETS
Europe

North American

Pacific Rim

Latin American

ROUTES AND ROUTE STRUCTURE

Short Haul

Long Haul

Hub and Spoke

Point to Point

FARE STRATEGY
Low Fare

Premium Fare

COMPANY STRUCTURE

Independent

Alliances

INFORMATION SYSTEMS FOCUS

Passengers

Operations

Logistics

Business

Airline Industry Value Chain

FIRM
INFRASTRUCTURE
HUMAN
RESOURCE
MANAGEMENT
TECHNOLOGY
DEVELOPMENT

-Financial Policy - Accounting

Flight, route and
yield analyst
training

-Regulatory Compliance

Pilot Training
Safety Training

Baggage Handling
Training

Computer Reservation System, In-flight System

Flight Scheduling System, Yield Management System

- Legal - Community Affairs

Agent
Training
Product
Development
Market Research

In-flight
Training
Baggage Tracking
System

Information Technology
Communications

PROCUREMENT
Route Selection
Passenger Service
System
Yield Management
System (Pricing)
Fuel
Flight Scheduling
Crew Scheduling
Facilities Planning
Aircraft Acquisition

INBOUND
LOGISTICS

Ticket Counter
Operations
Gate Operations
Aircraft
Operations
On-board Service
Baggage Handling
Ticket Offices

OPERATIONS

Baggage System
Flight
Connections
Rental Car and
Hotel Reservation
System

Promotion
Advertising
Advantage
Program
Travel Agent
Programs
Group Sales

OUTBOUND
LOGISTICS

MARKETING
AND SALES

Lost Baggage Service

Complaint Follow-up

SERVICE

trenghts

Diversified geographical reach

mitigates business risks
Young aircraft fleet decreases
the maintenance costs and
reduces security issues

pportunity

Growing trends of tourism

industry in developed countries
helps to boost revenues
Growth through operational
alliances allows serving a large
base of travelers
Strategic emphasis on cargo
operations generates
incremental revenues

eakness

hreat

Weak financial performance

could hamper the market
position and future growth
perspectives
Investigations by competition
authorities and civil class
actions impacts the business

Intense competition and price

discounting pressurizes the
operating margins
Price volatility in petroleum
markets impacts the expenses
and the overall profitability and
margins
Statutory regulations impacts
the operating margins

 Diversified geographical reach mitigates business risks

Young aircraft fleet decreases the maintenance costs and reduces
security issues

 Weak financial performance could hamper the market position and future
growth perspectives
Investigations by competition authorities and civil class actions impacts
the business

 Growing trends of tourism industry in developed countries helps to

boost revenues
Growth through operational alliances allows serving a large base of
travelers
Strategic emphasis on cargo operations generates incremental
revenues

 Intense competition and price discounting pressurizes the operating

margins
Price volatility in petroleum markets impacts the expenses and the
overall profitability and margins
Statutory regulations impacts the operating margins

Dual Strategy of Singapore Airlines

Cost Leadership

Differentiation

It is relatively easy to copy individual elements of the system, but incredibly

difficult to duplicate the whole system, which has evolved historically and is
held together not only by formal processes but also by intangible elements
such as organization culture

Pillars of Organizational Activity

Rigorous Service Design and Development

Rigorous Service Design and Development

SIA views product design and development as a serious, structured effort
Development department that hones and thoroughly tests any change before it is
introduced
Maintain continuous improvement, and dispose off programs or services that no
longer provide competitive differentiation or that could be offered in a different way
Treats its customers high expectations as a fundamental resource for innovation
ideas
Instead of aiming to be the best airline its intention is to be the best service
organization

Total Innovation
Continuous incremental development
Outstanding Service On The Ground, Transforming Customer Service
and Soar, for Service above all the rest
Customers lifestyle based innovations
Being a leader and follower at the same time

Profit Consciousness Ingrained in All Employees

Vision Statement
Profit-linked salaries
Building high performing teams
Measurement of employee productivity

Achieving Strategic Synergies

Achieving excellence through subsidiaries
Doesnt readily outsource
Creates subsidiaries
Compares cost per seat

Developing Staff Holistically

Training at every level
Recruitment
Regular monitoring of staff

Other strategies
IT

Statistical
Highlights
COMPARISON WITH JET AIRWAYS AND EMIRATES

Statistical Highlights (Profit)

14000

2500

12000
10000

2000

8000

1500

6000

1000

4000

500

2000

-500
-1000
Jet Airways : 2821 million $

Jet Airways : Loss 584 million $

Statistical Highlights (Load

Factor)
72
70

82

68

80

66

78

64

76

62

74

60

72

58

70

56
54

68

Passenger Load Factor SIA

Passenger Load Factor Emirates

Statistical Highlights
72
71
70
69
Jet Airways : ASK 38064 million
km
SIA : ASK 120502 million Km

68
67
66
65
64
63

Overall Load Factor

Statistical Highlights (Employee

Data)
1000
900
800
700
600
500
400
300
200
100
0

Emirates have Revenue per Employee of

508,000 $

14600
14400
14200
14000
13800
13600
13400
13200
13000

Emirates have 41,471 employees

Statistical Highlights
10
9
8
7
6
5
4
3
2
1
0

14
12
10
8
6
4
2
0

Jet Airways : 6 cents/pkm

Jet Airways : 6 cents/ask

Thankyou

Statistical Highlights (Employee

Data)
9000
8000
7000
6000
5000
4000
3000
2000
1000
0