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
