Situation Analysis of the Company & Product
Situation Analysis of the Company & Product
Singapore Airline history
1940s – 2000s
Way back to the early days, even as the Malayan Airways during the 1940s and 1950s, they were already bursting a string with their commitment to service out their best performances in all kinds of area. A commitment they continue to this very day. The history of Singapore airlines can be sketch out back to 1 May 1947. When a Malayan Airways (MAL) Airspeed Consul took off from Singapore kallang Airport on the first of three scheduled flights a week to Kuala Lumpur, Ipoh and Penang. Subsequently, over the next five year, bigger capacity DC-3 aircraft were launch and this meant that faster and more pleasant flights are obtained and the extension of services to destinations in Vietnam, Myanmar, Sabah, Sarawak and Indonesia. Concurrently, the flight refreshments had improvised dramatically from just ice water and biscuit to alcoholic beverages and superb meal to the passengers. On 16 September 1963, the league of Malaysia was born and the Airline became known as Malaysia Airways Limited.
In May 1966, it converted into Malaysia-Singapore Airlines (MSA). In 1968, first time ever happened, its annual revenue had hit up to S$100 million. At the same time, the sarong kebaya uniform were introduced for the Singapore Girl, which was designed by French couturier Pierre Balmain. In 1972, “MSA” has split into 2 new entitles; Singapore Airlines and Malaysian Airlines. The following years was committed to expansion and strengthening the newly form Singapore Airlines. In order to produce more proficient services at Paya Lebar Airport, Singapore Airport Terminal Services (SATS), was set up. On 1 July 1981, the services was shifted from Paya Lebar to the new Singapore Changi Airport. Two years later, Airline House, Singapore Airlines corporate headquarters in the Changi Airfreight Centre was officially opened. Singapore Airlines became the first airline to operate a B747-400 on a commercial flight across the Pacific.
Furthermore, “Tradewinds”, a Singapore Airlines subsidiary, became Singapore’s second airline in February 1989 who has a nickname called “silkAir” which has an established network of more than 30 destinations in the region. On 22 November 1990, with the arrival of SQ23 from Amsterdam, Singapore Airlines embark operations from the new Terminal 2 at Singapore Changi Airport. In September 1998, Singapore Airlines instill new standards in air travel by launching a new suite of products and services that worth S$500 million across all there classes of travel that offers better standards and comfort. In 1989, Singapore Airlines (SIA) launched KrisFlyer, its first exclusive programme that consist of First, Business and Economy Class customers to earn mileage credits.
In February 2004, SIA set up a new record for the world’s longest non-stop commercial flight from Singapore to Los Angeles. Furthermore, in October 2006, SIA launched a wide-ranging suite of new range of cabin products containing the world’s widest First and Business Class full-flat seats products, as well as new Economy Class seat, and the next generation of the award-winning Krisworld inflight leisureliness system. In addition, SIA was the first airline to operate out of Changi Airport Terminal 3 in January 2008. In the present day, SIA operates out of both Terminal 2 and Terminal 3. In August 2008, SIA infuse a all-Business Class non-stop service to Los Angeles. Moreover, 21 January 2009, SIA obtained the first of 19 new A330-300 aircraft in Toulouse, France. This aircraft consist of two-class layout, with 30 new Business Class seats and 255 Economy Class seats.
‘ SWOT Analysis ‘
As part of our commitment to corporate governance principles, Singapore Airlines attaches a very high priority to ethical business conduct in the markets in which we operate. We engage employees, contractors and agents on the basis that their integrity in the conduct of their work is critical to our business and reputation. We welcome your comments, questions and thoughts about our Company’s ethics and integrity. Your comments will be treated in confidence. Send to: [email protected] or contact us, 24 hours a day, on +65-9387 5667
As part of efforts to help strengthen Singapore’s image as a world-class cultural and sporting event city, the Singapore Airlines International Cup horse race was established in 2000. With an annual sponsorship of S$3 million, the event draws participation of top horses and renowned jockeys from all over the world.
Singapore Airlines contributes to numerous educational programmes and events. These programmes provide students with the opportunities to achieve their full academic potential. Some of our contributions include: • Rebated air tickets to the newly established Singapore Sports School to nuture emerging sporting talents and provide opportunities for our budding athletes to gain exposure through active participation in international competitions. • Educational assistance to communities through scholarship programmes such as the Singapore Airlines Untuk Pendidikan in Indonesia, the Smiling Together project in Thailand and the Singapore Airlines Bantay Edkasyon Project in the Philippines.
As an international corporate citizen, Singapore Airlines recognises the importance of contributing to the communities it serves. Through corporate donations, sponsorships and other forms of support, Singapore Airlines provides backing to a wide range of local and overseas community groups and charity organisations such as the Community Chest of Singapore. The Airline has also supported various international community projects, such as providing air travel for Australian social workers to Dhaka in Bangladesh for a project to prevent hearing loss in textile workers.
Singapore Airlines staff have also self-started volunteer groups which spearhead activities for members to reach out to the less privileged. For example, the Cabin Crew Club for Community Care or 5Cs, founded in May 2001, annually organizes various activities and outings for residents of the Asian Women’s Welfare Association (AWWA) Community Home. Made up of volunteers from our cabin crew and ground staff, the club also organises activities for students of Chao Yang Special School on a regular basis.
Embracing new technology and Green initiatives on the ground
Singapore Airlines embraces new technology from aircraft and engine manufacturers. We often order new aircraft types before they’re built, because we believe in backing manufacturers to develop innovative technology. As such, the Airline operates one of the youngest and most fuel-efficient fleets in the skies. We also take pride in being the first to operate the Airbus A380, the cleanest and greenest aircraft in operation today. Its fuel burn per seat mile and carbon dioxide emissions per customer are the lowest of any aircraft. The A380 is also quieter, both inside and outside the cabin. On the ground, the Airline continues to do its part for the environment by implementing electronic ticketing across its network –- an initiative that not only reduces costs but saves trees as well – and embraces energy conservation and green building designs at the workplace to reduce energy usage.
• Strengths: characteristics of the business or project that give it an advantage over others • Weaknesses: are characteristics that place the team at a disadvantage relative to others • Opportunities: elements that the project could exploit to its advantage • Threats: elements in the environment that could cause trouble for the business or project
The unique selling proposition (a.k.a. unique selling point, or USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. It states that such campaigns made unique propositions to the customer and that this convinced them to switch brands. The term was invented by Rosser Reeves of Ted Bates & Company. Today the term is used in other fields or just casually to refer to any aspect of an object that differentiates it from similar objects.
Benefits of SIA.
Compare with other competitor.
Adding to the pressure, the price of jet fuel in Singapore has risen 37 percent since April 2010. Fuel now accounts for 41 percent of Singapore Airlines’ costs vs. an average of 27 percent since 2004. A “high fuel price and weak economic environment are particularly challenging to long-haul airlines,” Goh said. Singapore Air faces greater competition on Europe-Asia routes as Emirates Airline and Qatar Airways expand their more centrally located hubs and win premium passengers with improved front-cabin service. At the same time, regional and economy travelers are being targeted by low-fare airlines such as AirAsia (AIRA) and the Jetstar unit of Qantas Airways (QAN). “They’re being squeezed at both ends of the plane,” says Andrew Orchard, a Royal Bank of Scotland (RBS) analyst in Hong Kong. “They have less growth now and a lot more competition.” Last year Qatar was named the world’s best airline by rating group Skytrax, an award that Singapore Air received in three of the five years through 2008—and has not won since. Southeast Asian rivals Thai Airways International (THAI) and Malaysian Airline System (MAS) will this year both add Airbus A380s, Singapore Air’s flagship plane.
“Clearly, the competition in some areas has got a lot better,” notes Skytrax spokesman Peter Miller, citing Qatar and Seoul-based Asiana Airlines. “We are seeing a more level playing field in product standards as many carriers seek to match Singapore.” At Singapore’s Changi Airport, Emirates and Qatar now operate a total of 74 flights a week. Low-cost carriers including Tiger Airways Holdings, part-owned by Singapore Air, have boosted their share of Changi’s passengers to 26 percent last year, from 5.6 percent in 2005, helped by the opening of a budget terminal. Singapore Air now accounts for about a third of Changi’s passengers, down from more than half in 2008. Tourist spending in the city has jumped by half since 2008, aided by two new casinos and a 23 percent rise in passenger traffic through Changi.
Many of those flyers didn’t choose Singapore Air, however. With its front-cabin business under pressure, Singapore Air’s management is moving to increase the airline’s presence in the low-fare market. Besides its 33 percent stake in Tiger Air, Singapore Air is setting up a long-haul discount operator called Scoot. It will start budget flights from its base in Singapore to Tianjin in China, Bangkok, Sydney, and Australia’s Gold Coast this year. Singapore Air may have little choice since business travelers, long the backbone of its profitability, are trading down. First- and business-class growth industrywide peaked in May 2010 and has lagged the overall market since October, according to the International Air Transport Association.
Singapore Air’s available-seat kilometers—the standard measure of capacity—have fallen by 5.1 percent since 2008. And the number of seats occupied by paying passengers has dropped even further, sinking 7.3 percent over the period. The carrier isn’t expecting a robust turnabout anytime soon: It recently began offering some of its pilots up to two years of unpaid leave to seek work with other carriers. “The world has changed for them,” says CAPA’s Harbison. “The days of being able to rely on the Singapore Girl to pull people in are gone.” The bottom line: Singapore Air, which faces new competition from Middle East carriers, has seen its passenger count fall by 12 percent since 2008.
Singapore Airlines (SIA) has long been known for its iconic Singapore Girls, the demurely smiling stewardesses whose beauty and in-flight pampering harken back to a day when aviation was glamorous—and profitable. That allure, made famous in ads, drew high-paying premium-class flyers to Singapore Air, which in 2006 became the airline with the highest stock market value in the world. Thanks to belt-tightening by business travelers and the rapid growth of Middle Eastern airlines intent on offering even more in-cabin luxury, Singapore Air’s passenger count has fallen 12 percent since 2008—the biggest drop among 12 major full-service Asia-Pacific carriers.
Air China overtook it in 2009 to become the world’s most valuable airline by stock value. Even worse, Singapore Air, which hasn’t recorded a full-year loss since it went public more than a quarter century ago, on May 10 reported red ink for the first quarter and slowed capacity growth at its flagship unit. “The fact is that they’re hurting,” says Peter Harbison, executive chairman of CAPA Center for Aviation, a Sydney-based company that advises airlines. “There’s good cause for a fundamental review of Singapore’s strategy.”
The carrier, controlled by Singapore state-investment company Temasek Holdings, reported a loss of S$38.2 million ($31 million) in the three months ended March 31, compared with a S$171 million profit a year earlier. That followed five straight quarters of declining earnings. The company’s yields, a measure of average fares, are “under pressure” as competition forces it to keep prices low, Goh Choon Phong, Singapore Air’s chief executive officer, told reporters on May 10.
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