Singapore Airlin

1. Critically analyse if Singapore Airline should enter the market.

To consider whether Singapore airline should enter into India aviation market it needs to take into account of a few considerations. Firstly the market attractiveness of India aviation market. With significant economic growth in the past few decades India aviation market is projected to grow to become world’s third largest market in 2020, largely due to its increase in population, income and tourism. Also, rapid growth of the middle class in India indicates increase demand in full services in air travel. Secondly, Indian government decided to deregulates and enable FDI in to its aviation industry which reduces barrier for foreign firms to enter. Thirdly, partnering with a larger local business gives SIA a higher opportunity to success in the market. Tata who holds good understanding of the Indian market could provide valuable recourses, such as networking and knowledge that allow SIA to innovate and quickly adapt the industry environment to meet consumer demand.  Tata partnering with Malaysia airline could also be seen as an opportunity where Tata can induce customers to SIA who are not satisfied by low cost services and seek for higher quality of service and not consider other airlines. Although there are issues that makes India market an unattractive market for SIA to enter, including slow economy, high oil price, hostile cost environment etc. it can be overcome if SIA can reducing its margin in long term.

1. If Singapore Airline was to enter the market, how should they do it?

               To start with, SIA needs to identify its opportunity in the India market by:

• Knowing the recourses available and cost needed for the market.
• Set its objective (eg. gain market shares from existing competitor).
• Establish and maintain well relationship with Tata to obtain valuable recourses.
• Partnering with Tata may assist SIA to build relationship with local organisation such as government, suppliers, distributor etc.

As CAPA indicates Indian aviation market has greater proportion of domestic market than international, SIA should focus on targeting domestic Indian passengers. SIA should commence with introducing its high quality air service to local traveller and receive feedback from them then use them to create a specific model to position itself in the Indian market. (Choice of aircraft, numbers of crew on board and food serving)

SIA perhaps can start serving with a lower price to attract and acquire customer. (as Indian passengers are unfamiliar with full service and high price flights)

SIA then should start investing to create its capabilities and competencies by:

• Working on how to efficiently operate in the new market. Eg what system and technology to use.
• Establishing brand awareness with advertising and customer relationship with high quality services.  
• Learn from Tata to familiar with peculiarities of India. Including learning local business practices and understand culture difference.
• SIA’s strategy needs to be flexible to adapt the market environment and challenges.
• Have strong personal relationships to build up locals distribution networks to fluent its operation.

It is also important to have office with Singaporean representatives in India to more efficiently operate its new strategy.