Strategies Of Singapore Airlines

The Civil Aviation industry is one of the most newest and competitive businesses known to the corporate world. With new organizations coming to picture and struggling to gain a hold, it has one of the most turbulent histories. This has seen the industry undergone a series of changes throughout the world. The Open Sky Policy is being followed in many countries. Airlines alliances are being forged for enhanced networking of destinations and code sharing among airlines is becoming common. With facilities for easy entry, exit and freedom over fare structure, domestic private operators are competing with national carriers. Airports, apart from providing a range of facilities to the airlines, are evolving into multifaceted: (1) Hubs containing hotels (2) Conference centres (3) Duty free shops (4) Shopping malls (5) Connecting flights (6) Booking on net (7) Mileage (5) Lower fare for early booking.

Air travel, driven by liberalization and globalization, remains the fastest – growing market. Over 2.1 billion passengers departed on scheduled journeys in 2006 (IATA 2007). Strong economies have witnessed international passenger demand grow by 5.9%. Driving these developments is market liberalization, the availability of more fuel efficient and longer- range aircraft that are better able to serve thinner routes.

Focus on service quality is the need of the hour if the airlines aspire to improve market share and further enhance financial performance in domestic and international markets. A necessary corollary is that domestic airlines need to have valid and reliable measures to better understand the variables likely to have a bearing on the service quality offered by their organization, e.g. expectations and perceptions of airline passenger vis-à-vis service quality.

The information provides introduction to theoretical foundations for measurement of service quality in the context of the airline industry. This is followed by a brief profile of civil aviation industry in India. Research objectives, hypotheses and methodology are discussed followed by results from the data analysis. The study has an applied bias as it also discusses practical implications for airline marketing managers in India.

Air India is a Government owned entity which has recently suffered severe setbacks due to some of the areas which has jolted the company. My study will identify the key areas of deficiency and the areas needing development.

SCOPE FOR THE STUDY

The scope of this study is confined to the marketing strategy, financial strategy, customers and employee’s relationship strategy, commercial policy, safety measures adopted by the AIR INDIA and SINGAPORE AIRLINES and its possible application in the Aviation Industry in general…

The Success of Singapore airlines within a short span has led me to take this step forward to choose the points in the thesis which will help us compare and improve the areas .

OBJECTIVE OF THE STUDY

The fundamental objectives of the study given below.

To know the development of aviation industry in India.

Salient features of Air India and Singapore Airlines.

To compare financial and marketing strategy of Air India and Singapore Airlines.

To compare Customers services and employees relationship of Air India and Singapore Airlines.

The study is essential to identify the Efficiency in operative services.

The study is essential to if airline are providing good services such as hospitality, food, etc facilities.

To examine the correlation between the services provided by Air India and Singapore Airlines

To make suggestion and plan of action for appropriate measures.

HYPOTHESIS

Related to the above subject, the Researcher has framed the following relationship in this Hypothesis:

“STRATEGIES OF SINGAPORE AIRINLES WILL BE POSITIVE

AND PROFITABLE COMPARE TO AIR INDIA”

It’s my idea that Singapore airlines will be good compared to Air India in many aspects.

Thus comparative study will help me in determining the benchmarks and the areas of development.

The data collected firsthand and the data acquired through other resources will be very helpful.

LIMITATIONS OF THE STUDY

The study is restricted to compare the strategies of AIR INDIA and SINGAPORE AIRLINES.

For provision of better transport service to consumers.

The study is essential to identify the Efficiency in operative services.

The study is essential to if airline are providing good services such as hospitality, food, etc facilities.

The study is confined to Full Service Carrier viz Air India and Singapore Airlines and there are limitations arising out of the inability to collect data from all the airlines in Mumbai city as it require more time and resources. The fundamental importance of the Service Provided to Passengers by Air India and Singapore.

For provision of better transport service to consumers.

The study is essential to identify the Efficiency in operative services.

The study is essential to if airline are providing good services such as hospitality, food, etc facilities.

Thus the research is confined to only two airlines one from Domestic Airlines and International Airlines.

LITERATURE REVIEW

NEED FOR OPEN SKIES POLICY

An increasing demand along with the aim of promoting promote Travel & Tourism, India adopted an Open Skies Policy.

Business is nothing but the way of generating revenue by exchanging commodities

Open Skies policy is nothing but the agreement which facilitates a better and effective business. It is the green card that any Airliner can get from any country to allow it to avail an unlimited access at its Sovereign territory. There would be no need for any further authorization for the regularity of service; there will not be any need for an airliner to get any agreement for visiting any number of airports. In short it will allow an Airliner to use any country’s territory to conduct its business without any hindrance.

This is a hard view to see, because of recent protectionist measures by the economies around the world. This is something which allows an Airliner to expand its wings as it opens a wide market and at the same time it creates a ground for tussle among the Airliners as it allows different Companies to compete openly.

This agreement is a rare one and is considered feasible by those countries where there are hardly any national carriers, at the moment there are only a few such nations practicing this policy. India for an Instance has its policy of bilaterally agreeing to the nations who have such an agreement with her.

Recent years have seen a very bright future of Aviation industry in India as more masses are opting for Air travelling over traditional travelling options. The travelling is getting cheaper and cheaper every day as Government is also taking effective measures which have lowered down the costs to the Airliners. With fresh markets a lot of companies have come to play. Air India, Kingfisher, Sahara, Indigo, Spice jet and numerous others are entering into the market every often.

This has no doubt become one of the most lucrative sectors of business in India. With more people all around the world looking for cheaper travel, LLC’s or the Low cost carriers have taken its place. The business for LLC’s have grown recently phenomenally, one such source says about 38% since last 2 years

It’s all dependent on the Civil Aviation ministry of that particular nation which decides the fate of the airliners operating on its soil. With companies having a much liberal ground it has provided much needed tolerance and time to the Airliners to focus on its core competence values.

FACTS ABOUT AIR INDIA AND SINGAPORE AIRLINES

WHO IS AIR INDIA

Air India is a government of India Run Aviation company which called NACL, an Aviation company which in recent years seen a series of changes, it owns which is the largest and oldest airline carrier fleet of republic of India. The Air India has a vast fleet of Boeing Airbuses which serves a distant region including Asia, Europe and Northern America. The company can boast to be India’s first privileged Airline Company which has seen the rise and fall of British government

The company has its corporate office at the Air India building in Airman Point, Mumbai, India. The company boasts of being the 16th airline operating in the Asia region. Its domestic operation is confined to India with its hubs at the Chhatrapati Shiva International Airport and the Indira Gandhi International Airport.

A significant event in the Airline history is the invitation of it to the membership in Star Alliance in 13 dec 2007, the company is expected to be its member by summer 2011.

EARLY DAYS

The company has seen the days when India was witnessing political turbulence and establishment of any company was not an easy thing. J.R.D. Tata is the person who was once said to be the architect of Modern India created a company which has grown itself to such a grand scale. The company seen itself as Christened in the year 1932 as Tata Airlines by the Tata sons, now called Tata Group.

De Havilland Puss Moth, the single engine aircraft made its debut on the year 1932 on the 15th of Oct, flown by the RAF pilot Nevill Vincent, carried an Air Mail of the Imperial Airways.

The route was between the Karachi’s Drig road and the Bombay’s (now Mumbai) Juhu Airstrip.

The aircraft flew all the way to Chennai (previously Madras) via Bellary. After which the company never looked back.

EXPANSION

The company has grown leaps and bounds after the II World war. Airline restored the usual commercial service and the company became a public company on the 29th July of year 1946, the company then known as Tata airlines was named as Air India. Just after the Indian Independence, the Government of India acquired 49% of the shares and intended to get 2% more. The company in return got the privilege to be the Flag Carrier and started its service to International destinations under the Tag Air India International.

The first trip was by the Malabar princess, which was L749, Lockheed constipation between Bombay to London via Cairo and Geneva. This followed the service to Nairobi via Aden.

The government of India decided to purchase the stake which proved its majority in the Air India International Ltd and this was named the Air Corporation act, this marked a series of changes which were rather fruitful and led to the nationalization of the Air transpiration Industry. As a result all of the domestic services were transferred to the corporation which is called Indian lately and was much known as Indian Airlines.

The International fleet saw addition of more aircrafts with the first inclusion of the L-1049 Super Constellations and started its services to Hong Kong, and the Far East destinations including Tokyo.

JET AGE:

Another remarkable achievement was its conversion of the existing fleets of aircrafts which were piston aircrafts. The introduction of the jets initially replacing few of the jets and then replacing the entire fleets with its Boeing 707-420 initially , the first registered jet was VT-DJJ in the 1960’s which had its service rendered to New York city Via London. Air India became the first Industry’s first company to have all Jet-fleet. Air India further did the expansion with the inclusion of the Boeing 747-200B and the type of fleet was named the iconic Palace in the Sky which had its windows painted in the arch style found as the Indian Palaces. Then the company bought two Boeing 747-300M in the year 1986, this had mixed cargo configuration providing separate bays for the first class and the Economy class services.

1990’s:

The 1990’s have a lot for Air India to boast about, the company started its first non-stop flight services between New-York city and New-Delhi, the flagship was expanded with the inclusion of the Boeing 747-400 named Konark. The second US service was to O’Hare International Airport in Chicago.

In 1999 the company had its first dedicated terminal terminal opened at the Chhatrapati International Airport in Mumbai the Terminal 2-C

2000 to Present:

Marked with its first service to Shanghai and third service to the United States at the Newark Liberty International Airport. The company decided to expand its feathers which were aimed to capture almost all segments of the society. The company hence started a low cost option called the Air-India Express, this had a positive impact on its business and the services stretched from Indian Subcontinent to the Middle East and South East Asia and soon all over the India with the cities like Ahmadabad, Amritsar, Bangalore and Hyderabad.

The US has since seen its dimensions to almost all places in Washington Dc and the New York City; however the services are terminated to some of the destinations.

The company has recently seen the merger of Air India with Indian with its name changed to National Aviation Company of India Limited. Hence both the companies came under one roof, and as a part of recoupment process the old aircrafts were overhauled and in 2006 about 111 new jets from Boeing and Airbus were added to its huge fleet.

FINANCIAL CRISIS:

The year 2006-2007 was hard for the Airliner as it brought financial distress and the loss was very huge estimated to be about 7.7 billion rupees and after the merger happened the loss went up to Rs 72 billion rupees by the year March 2009. This shook the company’s aspirations. The same year witnessed the hard period of the Global Financial meltdown, ever since then the government has revamped various reformations and restructuring plans. The roadmap has been outlined by the SBI Capital Markets Ltd for the recovery. The airline had to sell three aircrafts from its fleet for about $ 18.75 million to survive the financial crisis and the Airbus A300 and Boeing 747 were sold to another airliner.

CRASHES:

All together ten Flights have crashed Fatally of which most were due to the terrorist attacks, however its crash rate is lower than the other Airliners.

1950s

The first fatal crash recorded in the history of Air India was the crash of AI flight number 245, the Malabar Princess, registration VT-CQP. It was reroute to London from Bombay (now Mumbai) crashed on Mont Blanc, France and killed 48 people on board including the Crew.

The second event of Crash was of Kashmir princess (VT-DEP); it was carrying 19 people which included 11 passengers and 8 crew members. This flight was bombed in midair killing all people onboard.

In 19th July 1959 flight named Rani Aera registration (VT-DIN) was scheduled to land in Santacruz Airport, The vision was blur with Poor visibility as it was raining. The captain was using the panels for navigation and it was highly skeptic as the pressure shown on the barometer was set as 29.92”. Aircraft was about to land but the overshoot was delayed resulting in a massive crash, however no one was killed.

1960s

This decade witnessed only one crash but rocked the nation, AI flight 101 (registration VT-DMN) had 117 people on board. This flight had its fate sealed when the pilots were rendered with poor weather and the flight crashed somewhere in the border of France and Italy at the Mont Blanc. This is one of the cases which is shrouded in mystery as India’s one of the most Respected scientist died as well, Dr Jahangir Homi Bhaba. Father of Indian Nuclear science.

1970s

Flight AI 855 code named Emperor Asoka registration VT-EBD crashed immediately after takeoff from the Sahara International airport now called Chattrapati Shiva Terminal into the Arabian Sea on the 1st january1978, killing everyone aboard about 213 people.

1980s

Flight AI 403 codenamed Gouri Shankar registration VT-DJJ with 111 people on board crashed at Sahara International airport due to the explosion of the fuselage, it was enroute to Mumbai from Kuala Lampur International Airport. Bad weather is found to be the cause of this crash. 17 people altogether were killed. On the 21st June 1982.

Flight AI 182 registered VT-EFO on its route Montreal to Bombay, was blown into rubble by a big Bomb planted by the Terrorist organization Babbar Khalsa. They were avenging the Indian Government operation on the Golden Temple on the June 1984. The flight blew off the coast Cork in Ireland. All people on board 329 in all died. This led to suspension of all services to Canada.

1990s

Flight AI-132 Code named Emperor Vikramaditya Registration VT-EBO was enroute to Bombay from London on the May 7th 1990 with 215 people aboard. While landing on the Airport in New Delhi’s Indira Gandhi airport, the Left wing caught fire; while no one was killed the aircraft was damaged very badly leading to its dismissal.

2000s

Flight AI-829 codenamed konark was on the route Mumbai to Riyadh on the 4th September 2009, while it was taxing just before the takeoff one of the engines caught fire and flight was stopped due to emergency however no one died.

On the 2010 may 22 AI-812 crashed while landing on the Mangalore Airport. The aircraft fell short of the runway and fell into the deep George. 158 people died out of 166 people. This is thought to be due to to bad weather.

BIRTH:

Singapore Straits Company and the Imperial airways of Britain incorporated to form Malayan Airlines on the October 12th 1937. The airline with its maiden flight using a twin Turbine engine Airspeed consul took the first charter flight from the British settlement in Singapore to Kuala Lampur on year 1947. This was followed with an expansion of the company and the company bought a fleet of Airspeed Consuls. The company with other Commonwealth jets joined the much known IATA.

With inclusion a new variant of aircrafts the Douglas DC-3s, the company performed a much better operation and became a public ltd company by the year 1957. After which a series of other makes of aircrafts which included the Lockheed 1049, the Comet 4 and The Fokker F27. With the formation of a bigger Malaysian Federation which led to the inclusion of Malaya, Singapore and other Islands, the Airliner witnessed its name changed from Malan Airways to Malaysian Airways in the year 1963. The Airways soon acquired the Borneo Airways and in the wake of the separation of Singapore from the alliance in the year 1966 the airliner changed its name from the Malaysian Airways to Malaysia-Singapore Airways followed by rapid expansion of its fleet with the purchase of Boeing 707s and Boeing 737s. The company got its Corporate office in Singapore high rise Towers.

INCORPORATION AND GROWTH:

In the year 1972, the company called Malaysian Airlines was no more with the Separation of the consortium of Singaporean Airlines and the Malaysian Airlines. SIA with its Ads showing Kebya and Sarong wearing Air Stewardess as Singaporean girls. They got to keep all the 10 jets, all the trading routes and the Exclusive rights of Advertisement.

The Minister of Communications Mr. Yong Nyuk Lin took an active interest in the expansion of Singapore interests and new destinations were added to its list and soon the company started serving the Entire ASIA.

The 1970’s resulted in rapid growth and SIA accumulated the much needed revenue. The decade following it saw new services to the US, Canada and other European nations.

The company expanded its fleet further with the introduction of Boeings 777 and A340 airbuses.

Eventually the Company started its flights to Cape Town and Johannesburg in South Africa.

The Company soon had a vast fleet of Jumbo jets which were tarted calling the Megatons.

MODERN HISTORY:

The company witnessed upsurge in its profits and the sheer size proves that in the year 2004 SIA had its Direct Non-stop air services between Singapore to Los Angeles; this was accomplished using the Airbus A340-500. This was marked with 18 hours of nonstop flights which is the record duration of flight. SIA has converted the standard A340-500 from a standard configuration of Business class /premium economy to a 100 seats All Business Class configuration; this operates in the region of Singapore to Newark and Los Angeles.

The protectionist policy of Australia ,Canada and Indonesia started to hamper the unseeing growth and in a high level decision by the Australian Cabinet came up with the decision to not to grant a full freedom flights fro Australia to the US. Sources Say it was to protect the interests of Qantas in Australia, Air Canada in Canada and Garuda Indonesia. The shut down of Canadian market was as a result of complaints from Air Canada and was indeed a tough time for SIA

Source:www.biztravelguru.com

SIA with its up gradation plan came up with its news of buying about 25 aircrafts which are supposed to be state of art jets. A380 as they are known are fully equipped with facilities one can imagine of. US $8.6 billion deal was inked between SIA and Boeing on the 29th of sept 2000. The aircrafts which were supposed to be delivered by July 12, 2001 got delivered almost 5years late during the end of year 2006. The jets have changed the class and SIA have become the world’s first to operate a complete Flagship of A380. The airliner is thus a 5 star airline. As a part of deal the Airliner expected no delay with delivery of A380, however the delay was taken seriously be SIA’s CEO, Chew Choon Seng who decided to sue Airbus, to full the deficient Airliner bought Boeing 777-300ER before the A380. Now SIA proudly showcases SIA “First to Fly the A380 – Experience the Difference in 2006”

The airliner got its much awaited A380 by February 2006 which it displayed at the Asian Aerospace 2006. The Airliner now confirmed that as a part of future expansion they would be adding about 20 of the Boeing 787-9s. This decision came shortly after Airbus announced that A380 delivery could be further delayed for another 6 months.

To add to the woes of SIA a further delay was announced and SIA formally got its first commercial jet on 25th Oct 2007. The jet took its maiden flight from Singapore to Sydney. After it landed at the Sydney airport, it got tremendous attention of media. A lot of revenue was generated which was donated to the charities present there. By 28th Oct the same year same year SIA started a regular usage of its all new A380. Now it operates daily twice flight service to London, Paris, Tokyo, Zurich, Melbourne and Hong Kong.

The dedicated to the Airliner was noted when the Airliner even went on a daily thrice service to Iceland during the Volcano eruption as a part of its plan to evacuate stranded passengers.

The Airliner was not untouched by the global financial downturn. As a part of Cost cutting measures and revenue saving activities. The Airliner announced that they would be phasing out 17 aircrafts from its fleet between April 2009 to March 2010. It had ordered new jets to add to its existing fleet which they decided to not to go ahead for some time.

CORPORATE:

The Airliner is very much a Big Corporate but its base lies on the strength of Singapore government. Its shares are divided among broad parties. The maximum shares are held by Temasek Holdings about 54.5% and the Care is taken by Singapore Government. The government has its Golden Share as it directly receives its instructions and ways from the Singapore government’s financial wing. Minister Lee Kuan Yew has taken his personal Interest of the government and recently directed the Airliner to get the Costs cut to counter the Global meltdown that gripped the whole world. He also helped to solve the tussle between the pilots and company over pay related issues. On 2 oct year 2007 the company inked a deal with the UK as a part of Open Skies Agreement to give a clear signal to the world that the Company is as competent as any other company and that it has no intension to receive any aid from the government of Singapore even though it is a clear government links.

The company has always tried to expand its borders; the first such effort was in the year 1989 when the company tried its tripartite alliance between SIA, the Delta Air Lines and the Swissair, however with a negative financial result the company decided to dissolve the partnership in the year 1999. The company formally divested 5% of stakes into each other and terminated the partnership with all sides suffering losses. Again in the year following it saw SIA formally buying about 25% of stakes in Air New Zealand in an attempt to expand its base to other nations, however Air New Zealand saw its financial graph going downwards, it forced the Government of New Zealand to buy the company, which reduced SIA stake to a mere 4.5% compelling SIA to sell that remaining stake.

Further hoping to get a stand in the Aviation market, the company decided to purchase shares in Virgin Atlantic Airways and bought about 49% of shares. With the end march 2000 the company invested 600 million pounds, however this effort was futile as well, the company suffered losses and by year 2008 the company formally accepted that the performance was below expected and sold it in market.

By 2004 the company made its plans that it is going to enter the Low cost aviation Sector and established Tiger Airways. This time there were various players, the Bill Franke firm invested 24%, Tony Ryan and family 16%, Temasek Holding 11% and the remaining 49% by SIA.

WORKFORCE:

Source: sg.travel.yahoo.com

SIA workforce is a mammoth figure and the organization has been rattled by serious strifes. The company has strength of a strong 29,457 employees. Pilots comprise of 2,174 members and about 6,914 are the Cabin crew. There has been tussle during the SARS outbreak, the financial downturn and numerous other instances. To assist the organization the company has five Labor Unions:

SASU, It is the Air staff union of SIA

SECEEU, SIA’s Union for Engineers and Executives.

SATSWU, SIA Union for Workers of the Airport Terminals

ATESU, SIA’s association of Air Transport Employees

ALPA, Association of Air Pilots

Despite of having so many Unions it was very frequent to see brawls between the Staff and the Management. ALPA or the pilot’s association themselves had 24 encounters. The Union’s most recent such dispute was in 2007 when the management tried to amend the salaries of pilots who were to flew A380 airbuses. The salary dispute was solved in Court with court finding the SIA pilots earning more than even some of the Company’s Vice Presidents.

Government intervened and ALPA’s 22-member union was formally dissolved on 17th Nov 2003 owing to government fears that internal politics could be devastating. The company started working to improve the relations among the members of the company. The standoff was broken their approach which pledged Pro worker-Business thinking.

The labor Movement 2011 aims to gain this. These Unbiased efforts have proved fruitful with a very improved communication between the Management and Staff; this has been more effective with both sides taking a collective decision and a rather non Autocratic approach of the management.

BRANDING:

This has been a bit different than the other counterparts where the Airliner greatly concaves its aircrafts and other services, however SIA has emphasized on the Flight Attendants “The Singapore Girls”, wearing a Sarong Kebaya symbolizes Cultural Singapore. The Dress code by Pierre Balmain has been often criticized where critics say that the modern Singaporean women have become self reliant and independent and the Approach is quite false and doesn’t showcase the true face of Singapore and that the Crew should wear dress which are more modern.

Owing to that thought the dress was redesigned by Christophe Galibert which features jackets and trousers. Their approach I consider very unique and Fruitful where every other is busy showing their facilities, showcasing and emphasizing on the hospitality has a genuine effect.

A recent decision rather on the January 2007 was that the fleet which is in its modernization phase would be showcased and that the contract with Batey Ads would be renewed. After a prolong discussion it was decided that the so called “Singapore Girls” image would be retained although the spotlight would be on the promotion of its modern technology.

The very year SIA gave its contract of Advertisement to an Agent TBWA for a whopping S$50 million/ Year which would last for 5 years, this New York based company has taken care of the Advertisement since then.

Another change is its logo which has got SIA bird enlarged and moved to the side. It has largely remained unchanged since then.

DESTINATIONS:

SIA along with its airliner Silk Air has recently unfolded its wings and has been successful with its stretching to almost 61 different points within 35 nations worldwide. It has created an impression of being the best in Southeast Asia. Recent reports confirm that its most of the business revenue is generation from Australia it’s estimated to be 11% alone .Its approach has been very ruthless to the Australian market who had to ultimately follow its protectionist policy, so did Canada. Qantas doesn’t see itself to be at par with SIA with its better hospitality and Its Class of Comfort.

With ASEAN and other organizations who have recently created a very strong bond between the nations like Thailand, Singapore, Japan etc nations and UAE in recent days, it has become a Cash cow for SIA. With Now proper MOU’s between Governments of Singapore, UAE and Thailand the trips has been almost double every day and this has resulted in more profit due to economy in scale.

Its plans to open up bases in Canada and Australia however have got setbacks to the respective government’s protectionist measures. A recent effort to get a route from Australia to the US was undermined; SIA is thus trying ways to persuade the government to review its policies lately. Air Canada is pressurizing the Canadian government to block SIA’s quest to set Vancouver as its North American Base.

The Malaysian market has various players coming up with the Singaporean Airlines and Malaysian airlines as the main opponents however a low cost airline Air Asia who complained to being sidelined and accusing the Singaporean government of favoring SIA, however SIA supported the government move to open up the Malaysian air for partial lubrication. Its market share which once was 85% came down to 46.7% recently since it had to share its route with Silk Air and LCC now.

SERVICES:

SIA has an up to date fleet and believes in a constant upgrading of its fleet. All of its aircrafts are less than 6 months old. The most admired aircraft is the Airbus A380 which is state of art aircraft. With the latest in market and other aircrafts in its fleet including Airbus A340, A330 and Boeing 747,777, SIA is ever ready to steal the show. The flight that it operates are jumbo sized so very cost effective except the Silk Airlines (a subsidiary) of SIA, it has small jets. SIA has named its Fleet as follows. Its names can be seen to be named in accordance to the aircraft types

Boeing 747-400============Megaton

Boeing 777===============Jubilee