Strategies and operations of Singapore airlines

As we have known, a business model describes the rationale of how an organization creates, delivers, and captures value – economic, social, or other forms of value. The process of business model design is part of business strategy as well as the path leading to success. For Singapore airline, business model is the most concern that has been helping the organization to success. We will analyze Singapore airline as one of the leading airlines in region as well as all over the world to see how successful it is and what kind of business model have they been using.

Executive summary:

About company products and services: SIA offer flights to 63 destinations over the world with high quality. All the aircrafts of Singapore Airlines have four different classes choose by the customers. Four different classes are economy, business, and first and suites classes with four different experiences. Singapore Airline from the beginning to understand that the success must be derived from the youngest, safest, most advanced and most fuel-efficient fleet.

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Our board of director will have: Chairman: Mr. Stephen Lee Ching Yen

Chief Executive Officer: Mr. Goh Choon Phong

And the other 7 members our boards of directors are experienced with working experience up to more than 15 years in many industries. The board of directors will co-operate with departments to manage and lead SIA. Directors will focus on some aspects of management:

Marketing and Operations:

Building Brand Name:

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Implementing “Singapore Girl” image strategy

Culture and entrepreurship:

This part will give the readers a summarised perspective of how SIA culture is formed as well as how we define SIA’s entrepreurship.

We will analisy factors that set up SIA culture:

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The uniform

Interal communications

External communication

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Career and developments

Besides for our business, we focus on providing destinations that covers over the worlds from Southeast Asia, Asian to America continent. Besides we still offer high service

Current and future business issues:

Current issues:

– Management Schedule flight

– Technology issues

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– Safety and Policies Issues

– Financial Issues.

Future issues:

– Competitor challenges

– Turn on to foreign country

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– Global alliance issues

Singapore Airline-Enterprise Innovation Products and Service

Singapore Airlines has been the world’s most profitable airlines, as an image of trends guider within the airline industry. The reason why Singapore Airline so successfully is because Singapore Airline from the beginning to understand that must build a youngest, safest, most advanced and most fuel-efficient fleet. From a technical perspective, Singapore Airline maintained in all airlines in the latest models, and strictly adheres to the replacement of obsolete models. More and more advanced aircrafts will be chose by customers in Singapore Airline Company. Inside the Singapore Airline Company now, there are 10 A380-800, 5 A340-500, 8 A330-300, 19 B777-300ER, 15 B777-200ER, 12 B777-300, 30 B777-200 and 9 B747-400.

All the aircrafts of Singapore Airlines have four different classes choose by the customers. Four different classes four different experience, there are economy class, business class, first class and suites. The economy class is suit to the normal customers. Nowadays, more space and intelligent features in the economy class let the customers feel more fun in their trip. The business class of Singapore Airline has the most spacious space in all the airlines over the world. It can let them have a comfortable business experience. Eight stately seats in the first class are stand by for the VIP customers with the five star personal services. In the suites, the seat features, dining, facilities and entertainment are the most fantasy experience that the customers can not image. Customers only can experience it on the Singapore Airline A380.

As a successful airline in the world, opposite to the budget airline, it pays more attention in the customer service. It is the first one to introduce the flight service and entertainment experience and strive to achieve the best one in the industry. Singapore Airlines is the first to introduce hot meals, free alcoholic and non alcoholic beverages, scented hot towels, personal entertainment systems, and according to customer demand to provide video services. Innovative, comfortable atmosphere and top flying experience is a critical success factor for Singapore Airline.

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Singapore Airline-Creativity Innovation Entrepreneur Network

Different to other airline company, when Singapore Airlines built up, it has been faced the problem: Because no domestic route, Singapore Airlines is doomed to compete for international routes with the international airlines from the outset. It included obtain permission to enter the airports, aircraft taking off and landing rights and to win new customers. Because Singapore Airlines face this problem in the beginning, it has created the initiative for competition and committed to the determination of brand building.

Singapore Airlines always keeps consistent in its brand communication and information networks. Slogan “Singapore Airlines-A Great Way to Fly”, whether in a single print media, or the number of television media publicity, remains consistent in order to emphasize the brand expectations.

Management team:

When talking about the Asian brand in the world most successful in many decades ago, surely Singapore Airlines (SIA) with Singapore Girl image will be mention. SIA is recognized as one of the best airline in over the world, they always pioneer and also a powerful competitor with other airlines. There are so many reasons for that acknowledgement. Most of them related to good management from the boards of directors. Besides, the asset of brand name always strong because their strategy always professional and diversification in over the world. SIA is really a famous brand which as an important factor for the development of company. Besides, it is considered a unique brand and differentiation with other Asian brands. This is structure about management mechanism of Singapore airline, include the members as:

Board of Directors:

Chairman:

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Mr. Stephen Lee Ching Yen: “In 1 January 2006, Mr Lee was appointed Chairman of SIA Engineering Company. He graduated from Northwestern University, Illinois, USA in 1973 with a Masters in Business Administration”.(Singapore Airline, 2010)

Chief Executive Officer:

Chew Choon Seng: ME Chew is CEO and the Director of Singapore Airlines Ltd. He is a Director of Singapore Exchange Ltd and of Government of Singapore Investment Corporation Pte Ltd. Besides he graduated a Bachelor’s degree with First Class Honours in Mechanical Engineering from the University of Singapore, and a Master’s degree in Operations Research and Management Studies from Imperial College, University of London (Singapore Airline, 2010)

Executive management:

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Jack Koh Swee Lim: Senior Vice President (Fleet Management / Marketing & Sales)

Zarina Piperdi: Senior Vice President (Human Resources)

Ivan Neo Seok Kok: Senior Vice President (Line Maintenance Singapore and International)

Anne Ang Lian Choo: Senior Vice President (Finance) / Chief Financial Office

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Leck Chet Lam: Senior Vice President (Partnership Management & Business Development)

(Singapore airline, 2009)

Besides, the managers of each other departments will have responsibility managing about their field such as marketing, HRM, Finance, design and planning, production as well as administration. With professional team of Singapore airline, SIA will continue strive more successful in future. Further, management team will help each department in diverse and various tasks in order to achieve smooth business run

Marketing strategy and operation:

Singapore airline applied many measures in marketing activities. They used the strategies such as:

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Building brand name

With identifying clearly orientation, Singapore airline had reached in building brand name. From the outset, SIA decided to apply strategy in locating brand name and service. Innovation, applying science and modern technology, excellent service became main factors in building brand name. SIA always take loyalty in their brand attribute. . Especially SIA always take the lead in adopting many innovations as well as apply many kinds of entertainment on the flight and they always striving to keep the first rank. SIA seen as the first airline which providing “hot meal” as well as the beverage has alcohol and no alcohol. Besides, they also apply the entertainment system; especially the passenger can watch their favorite movie. About science and technology sector, SIA always use the most advanced aircraft and always faithful to the policy about change old aircraft and import the newer type and more modern. The company has always taken the lead in the use of modern aircraft such as Boeing 747, Boeing 777, and in 2006, SIA will be the first to use the Airbus A-380.

“Singapore Girl” image:

The typical image for SIA can be found in staff (both male and female), especially the female flight attendants who always referred to as Singapore Girls has become very popular. In addition, the uniforms of SIA based on the harmonious combination between Malay Sarong and Kebaya , later to become symbol characteristic of SIA.

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With applying strategy through use image of Singapore Girls in strategy marketing. It really was an extremely impressive idea and form a subtle brand name. This girl image describes all of values of Orient people and hospitality as well as gentle, elegant and tasteful.

Communicate the message strategy:

Forms to communicate the message of SIA are also carried out consistently as brand name strategy. The main message “Singapore Airlines – A Great Way to Fly “is always fully present in the form of advertising in the media, besides the selective advertisements on television has brought the value as well as emphasis of quality aspirations of the brand. All the other communication messages are conveyed through the images of the Singapore Girl under topic and different contexts.

Vision of Singapore Airline:

Singapore Airlines has responsibility not only to be an excellent company, but also to be an excellent citizen of the world by enhancing the lives of the people. With that aim, SIA has made many commitments to society and community, and the health and welfare of country’s citizens. With this goal in mind, they’ve also made a strong commitment to preserving the environment – and our world for future generations. ( 2010, vision of Singapore airline)

Culture and entrepreneurship:

Internal Communications:

SIA is not a small company with few staffs. We are multi-national organizing with more than

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28,000 staff located in cities and subsidiaries throughout the world. That’s the reason we have been facing cultural problems because of multinational staffs. Everyday all our staff works together to produce a seamless and positive customer experience. All of them must respect each other as well as their cultures and using international behavior in daily operation such as shaking hand. Besides, in the pilot pool alone more than twenty-five countries are represented.

To keep communicating flow between staffs as well as to help staffs understand about company issues, SIA publishes its magazine monthly. Beside regular dialogue is organized to link management and staffs. To motivate contributing new ideas to improve SIA, we implement “Staff Ideas in Action” scheme for all staff participation. Finally, we still provide forum for evaluation of hard results in sales, markets, yields and customer satisfaction levels.

External Communications:

We are 5-star airline. Our planes are designed with video, spacious seats and many destinations. But basically at the bottom-line, we are trying to give the best services as we can. We train all staff to keep friendly and smile all the time. They must make customer feels comfortable and content in such circumstances. We want to build up public personification about a high quality of our service.

Continuing to train:

We understand that customers demand has been rising daily, we still understand that staffs knowledge is our core to success. That’s why we have 4 training centers (Cabin Crew, Flight Operations, Commercial and Management Development) for inspiring and demanding educational programs. The forms of study might be in classroom, on the job or through full scale simulations.

Career Development and rewards:

SIA staff is regularly appraised for performance, and potential. High-flyers are identified early and given every opportunity to learn and grow. Senior managers are uniquely well developed with frequent rotations amongst top positions in the company. This leads to a management team with great breadth and depth, with a shared understanding of “the big picture,” with a commitment to do what’s best for the customers and the business, not just for one or another department.

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If any staff performs well, they will be awarded by many ways such as rising pay, giving some days off or a promotion. We want staff to try their best, want them to understand that the organization appreciates their contribution and will award them fairly.

Entrepreneurship:

We offer 63 destinations worldwide:

Asia: East, west, north and south Asia

Europe: Denmark, France or England, etc

America: North America and South America

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Oceania: Australia and New Zealand

In these country destinations, SIA flights might be adjusted. There are some terminated destinations during financial crisis in 2007. Besides, other regional economic crisis might affect to SIA flight routines as well.

Besides, we still work with our code share partners to give the best. Hence, customers get to enjoy the convenience of enhanced frequency and greater choice of as one SIA product offering.

We offer high service:

Singapore Airlines (SIA) management quickly realized that the only thing to differentiate them self from competing airlines was is in providing on-air services for passengers. First, SIA must understand the needs and wants of customers. They come from different segment groups with different interest, that’s why understand these factors will help us to see the opportunities as well. Besides, we must make customers understand that travel is not just moving place to place. We must create a comfortable and pleasured way as a differentiation strategy.

Secondly, SIA will take place providing services such as free drinks, headphone  and other amenities, etc. By the time, we are trying to go further as well. And SIA has been trying to make service as a culture through the whole organization.

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Current and future business issues:

Current issues:

Management Schedule flight

Running in airlines business is quite complex, furthermore when The Airlines scheduling the time flight. Not only required on the million investments but also requires having enough passenger and crew cabin. There is a problem when the Airlines scheduling the time, first must be organize what time is possible departure time from Singapore to other country and it not just one destination but also must organize the time schedule with all destination country. Second, the time in order to customer demand for each destination. Thus, the time must be schedule with both of countries.

Technology issues

As a high value in service, SIA has upgraded innovation into the operational system by international network of sales and air staff, agent and subcontractors (Asia case, 1991). Integrating in Technology infrastructure, SIA sign an agreement with IBM to meet a goal of focusing core business, efficiency of cost management, keeping in high standard service and job satisfaction (CRM Today, 2004). New technology can also bring benefit for passenger who can continue work along journey. Integrating in technology bring SIA makes competitive advantage.

Safety and Policies Issues

From the information of accident of Qantas that currently was happening at Batam Indonesia, SIA frequently and reassuring announcement. The same engine Air bus A380 with Qantas Airline make customer of SIA worry about it (New York Times, 2010)

Other safety issue is about Terrorism. SIA policy under the Singapore government’s policy decisions which all luggage must be check to avoid explosive and ensure that every suitcase in accordance with their owner

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Financial Issues.

All the issues above would be affected in financial issue. High standard service and customer satisfaction gain in financial cost. Inability of Manage the issues above could be shakes SIA. Based on the issue of Qantas aircraft accidents, Singapore Airlines should check and make sure the engine is a safe aircraft. Therefore, the cost of checking surged as should double check the machine (Yahoo finance, 2010).

Future issues:

Competitor challenges

Singapore airline has succeeded in competing with other airlines (business week, 2010). Singapore airlines focus on innovation into the operational. Based in the succeed, other airlines such as Malaysia airline, Thai airline, Cathay Pacific airlines and other airlines tend to imitate what have been done in Singapore airline and become succeed. Thus, Singapore airline will be threatening.

Turn on to foreign country

Due to maintenance a service to customer, SIA is more selective for recruiting employee. Those of issue will be affected in salary. In Singapore the rising salary is quite rapidly, the way hiring in good employee it also will spend in high salary and compensation. Based on the issues, will be imposed SIA turn on to foreign country

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Global alliance issues

The economics of United State is shaking whereas Singapore Airlines have an alliance with United State. This condition will be found a difficult to have Atlantic routes and it become a threat for SIA. Northwest and Delta announced their long Awaited merger this year in April, a combined enterprise worth $17.7 billion that from day one will serve 390destinations in 67 countries (Commercial appeal news, April 2008). Based on those information, probably SIA facing in bankruptcy

CONCLUSION

Hence, with clearly business model as well as apply correct strategy, Singapore Airline is really successful in develop their brand name. There are 3 point which is the superior of Singapore Airline are truly excellent service, constant innovation and technological exellence.

REFERENCING:

Business week (2010). Singapore Airlines. Retrieved: November 4, 2010 from

http://www.businessweek.com/adsections/2002/sap/sia.htm

Commercial appeal news (2008). Delta plus NWA: $17.7 billion airline merger will maintain hub in Memphis. Retrieved: November 4, 2010 from

http://www.commercialappeal.com/news/2008/apr/14/delta-northwest-directors-sign-airlines-combinatio/

CRM Today (2004).Singapore Airlines and IBM Announce IT Services Agreement. Retrieved: November 5, 2010 from

http://www.crm2day.com/content/t6_librarynews_1.php?news_id=112102

The New York Times (2010).3 Airlines Halt A380 Flights Over Engine Explosion. Retrieved: November 5, 2010 from

http://www.nytimes.com/2010/11/05/world/asia/05qantas.html?_r=1

Yahoo Finance (2010).Singapore Airlines clears A380 fleet for service. Retrieved: November 5, 2010 from

http://uk.finance.yahoo.com/news/update-1-singapore-airlines-clears-a380-fleet-for-service-targetukfocus-79e5e92672c5.html

Ron Kaufman. How does Singapore Airlines fly so high?. Retreived on Nov 11th, 2010.Source: http://www.trainersdirect.com/resources/articles/BusinessManagement/HowDoesSingaporeAirlinesFlySoHigh.htm

Singapore airline (2010). Goh Choon Phong Is Next SIA CEO. Retrieved on Nov 3rd, 2010. Source: https://www.singaporeair.com/mediacentre/pacontent/news/NR_0510.jsp?JSESSIONID=kv9dMHGTh9wPtp1201nm21yffNQxQgzWybmYSC8PQVLMvQxpyT0Z!106220420!NONE

Siaec (2008). Boards of directors. Retrieved on Nov 5th ,2010. Source: http://www.siaec.com.sg/company/bod.html

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