Question

1. Singapore Airlines Limited (SIA) A 5-star airline, Singapore Airlines (SIA) operates the world’s longest non-stop commercial flight from Singapore to Los Angeles and Newark and other trans-Pacific flights, and provides passenger services across more than 30 countries. Strategically well managed, its diversified businesses include aircraft handling and engineering. SIA owns SilkAir, an airline company overseeing regional flights catering to small capacity requirements in secondary cities, and Tigerair, a low fare airline that serves 37 destinations across 12 countries. In Asia, SilkAir helps passengers travel in over 30 cities. The company is the official sponsor of Singapore’s national football team and has continued to market the iconic Singapore Girl, a prominent element that depicts the flight attendants of the airline and is pegged as the central image for the brand. SIA was acknowledged as the best Asian airline in the Business Traveler Awards 2014. According to a survey by Fortune in 2015, it was ranked as the best international airline for business travel and best customer service. The airline has often ranked as one of the most admired company in the world outside the United States. Apart from being acknowledged for their service and efficient operations, SIA has also been commended for SIA’s 2014–2015 Annual Report reveals that the company carried 18,737 passengers that fiscal year, up from 18,628 the previous year, and had revenue of $15,566 million, up from $15,244 the prior year. In their 2014– 2015 Annual Report, the company reported net profits of $368 million, up from $359 million the prior year. In July 2015, SIA reported that its net profit in the first quarter was twice the amount made in the previous year due to lower oil prices, hence, lower fuel expenses for the airline. The airline saw a net profit of SGD $91.2 million ($67 million), up 162 percent from the same period in the previous year. In July 2015, all talks about acquiring a stake in South Korea’s Jeju Air had ended. Instead SIA chose to respond to budget airlines, which were a bigger threat for SIA with their increasing market share in Southeast Asia, by focusing on expanding in Australia, Thailand, and India. An investment in Jeju Air would have given it more access in North Asia, including China. CASE QUESTIONS 1. What is Singapore Airline’s competitive advantage?

2. How can this advantage be sustained?

Answer 1

What is Singapore airline’s competitive advantage?

Analysis of case reveals that it has a highly skilled human resource in the organization. It is evident by the strategic ability of the company to gauge the future opportunities and precisely analyze the needs of customers. Its management people are wise to target not only business class people, but also economy class people. The company provides long and short distances flights to cover more and more passengers. Singapore airlines limited runs a service called Tiger air that is low fare airline to fulfill the needs of economy class passengers or those passengers looking for low cost options. Skills of its flight attendants to make journey comfortable for customers also reveals that its human resource is skilled enough to provide superior service. Due to knowledge and skills of employees, Singapore Airline receives many awards. The employees of the company have strategic orientation as the management did not sign a deal with Jeju Air to capture north Asia market; because the management realized that low frill airlines posed more threat. Therefore, to expand the business in growing markets of Thailand, Australia and India, management team considered to keep resources to fight against budget airlines. This reveals that management people have a strategic approach, good knowledge of market and customers’ needs, and right tactics to promote brand. They also apply their knowledge to introduce efficient processes and provide better return to the investors. Overall, it can be said that the Singapore Airlines company practices a stakeholder theory approach to manage its business operation.

How can this advantage be sustained?

The competitive advantage of having exceptional skilled workers in the company can be sustained when the Singapore Airline company provides good career growth opportunities, better wages, training and development opportunities, a friendly work environment, etc. The company should specifically hire talented people to maintain the organizational culture that it has fostered. Considering these factors, Singapore Airline can sustain its competitive advantage.