Situational Analysis of Singapore Airlines

1.0 INTRODUCTION

The history of Singapore Airlines dates back to 1 May 1947, when the first scheduled flight of Malaysian Airlines took off from Singapore and then landed in Penang. It was on 16 September 1963, the Federation of Malaysia was born and the Airline became known as Malaysian Airways. In May 1966, it became Malaysia-Singapore Airlines. However in 1972, Malaysia-Singapore Airlines split up to become two entities - Singapore Airlines (SIA) and Malaysian Airline System (MAS).

The "Singapore Girl" theme was a key element in the company's advertising strategy since day one which represented personification of charm and friendliness. The stewardesses dressed in a "sarong kebaya" uniform designed by French couturier Pierre Balmain and it has became the internationally recognized image of the Singapore Airlines. Since then, it has gained excellence reputation in service with the help of its well trained employees and modern facility.

Many were surprised that a small island republic, measuring only 38km long by 22km wide and with population of 2.7 million, could have be one of the largest and most profitable airlines. It had become the world's 10 biggest international airlines. Even more remarkable were the accolades bestowed by air travel organizations. In 1990, SIA named as "airline of the year" by Air Transport World Magazine, "world's best airline" by Conde Nast's Traveler and "best international airline" by Business Traveler International.

2.0 ISSUES IDENTIFICATION

Despite of its success as leaders in service, in comfort and luxury, SIA must not feel contented with its current policy and strategy. Major issues that have been raised were whether SIA can continue to attract increasing numbers of International customer and if it wants to maintain its position as market leader, what will be the next agenda?

Other issues that SIA identified as threats are as follow:

i. Pressure from competitors that lead to a question on how to distinguish SIA from the competition knowing that the competitors have improved in their service quality.

ii. Rising living standards in Singapore mean high expectations among its more than 13,000 employees, of whom some 4,200 were cabin crew. This lead to difficulty in attracting younger people, motivate existing employees and maintain its policy of employing the best for customer contact roles.

iii. Could technology help in improving service quality; off-ground and on-ground? (This issued lead to the rest of the following issues)

iv. What technology to be developed so that the company's worldwide network of sales and air staff, agents, and subcontractors could function in unison.

v. What technology-based services should be developed to improve the customers' experience in the air?

vi. Could an "office in the air" work?

vii. To what extent could more comfort and entertainment be provided, and how could First and Business Class facilities be differentiated from those in economy? and finally

viii. How could all the ideas above be consolidated and effected so that SIA would be the technological leader in civil aviation?

3.0 SITUATIONAL ANALYSIS OF SINGAPORE AIRLINES

SIA is one of the world's 10 biggest international airlines. It is also a leader in service, in comfort and luxury. It was the first airline in Southeast Asia to order jumbo jets. Singapore Airline's competitive advantage lies on its hospitality of its people as it emphasize quality service to its passenger.

SIA was the first airline to put "snoozers" (fully reclining seats) in its aircraft. It went against the rules of Air Transport Association by serving free drinks, offering free movie headsets and other extras.SIA emphasize on quality service and that makes it selective in recruiting, train and retraining its staff.

However, rising living standards in Singapore mean high expectations among its more than 13,000 employees, of whom some 4,200 were cabin crew. This lead to difficulty in attracting younger people, motivate existing employees and maintain its policy of employing the best for customer contact roles.

With its strong profits, the airline was able to invest in new equipment without incurring significant debt. The airline had also joined in a trilateral alliance with Swiss and the American carrier Delta Airline to cooperate on customer servicing, interchangeable tour packages etc.

SIA top management also equally concern with services on the ground and off the ground. SIA has gained excellence reputation in service with the help of its well trained employees and modern facility. It had become the world's 10 biggest international airlines. Even more remarkable were the accolades bestowed by air travel organizations. In 1990, SIA named as "airline of the year" by Air Transport World Magazine, "world's best airline" by Conde Nast's Traveler and "best international airline" by Business Traveler International.

However, despite the airline's achievement, there were some concerns especially on rising competition from both Western and Asian airline including Hong Kong-based Cathay Pacific, Japan Airlines, Taiwan's airline called Eva Air, Thai International, and Malaysia Airlines.

4.0 ALTERNATIVES

The management of SIA now has the following options:

i. Faced the situation and remain status quo

ii. Develop technology-based services in it business

If the management decide to remain status quo, SIA may loss its market share to its rising competitors because there was definitely some concerns especially on rising competition from both Western and Asian airline including Hong Kong-based Cathay Pacific, Japan Airlines, Taiwan's airline called Eva Air, Thai International, and Malaysia Airlines.

If the management decided to adapt new technology, and if the technology is used properly and creatively, SIA can personalized its services more and make people feel that it really care. However, concerned was raised by top management, that if technology is being adapted, it should not result in disturbing other passengers, reduce valuable