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Singapore Airlines

Singapore Airlines. COMPANY A. Agenda. Company A in Brief Marketing and Strategy in Airlines Industry SWOT Analysis Customers Analysis Our Long Term Strategies. Company A in Brief - History. Malayan Airways, the predecessor of Company A, was started in 1947

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Singapore Airlines

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  1. Singapore Airlines COMPANY A

  2. Agenda • Company A in Brief • Marketing and Strategy in Airlines Industry • SWOT Analysis • Customers Analysis • Our Long Term Strategies

  3. Company A in Brief - History • Malayan Airways, the predecessor of Company A, was started in 1947 • The Airline was renamed Malaya- Singapore Airlines (MSA) in 1966 • MSA ceased operations in October 1972 and two new airlines, MalayCompany A Airline System (now called MalayCompany A Airlines) and Singapore Airlines, were born. • In 1978, Los Angeles Time acknowledged Company A as one of the world’s best managed and fastest-growing airlines • By March, 1997, Company A was operating 560 passenger flights per week out of Singapore (The largest private sector employer in Singapore.) • Company A actually increased revenue 7% to $4.4 billion and posted profits of $587 million in the fiscal year ended March 1998

  4. Company A Group : Total 21 subsidiaries

  5. K, S$ Company A Group Financial Result

  6. Performance of Company A • Financial Position • Company A managed to maintain its unbroken 27-years record of profitability • The Group’s financial position remains strong. As at 30 September 1998, shareholders’ funds stood at $11,777 million, a rise of $690 million (+6.3%) from a year ago • Accolades and Awards • Singapore Airlines (Company A) has once again been voted Best International Route Airline in the annual Conde Nast Traveler's Readers' Choice Awards, held on 14 October 1998. This is the tenth time in the award's 11-year history that Company A has been ranked number one among airlines flying internationally. • Best Global Air Cargo Carrier (ACompany An Freight Industry - 1994, 1995, 1996, 1997, 1998) • Load Factor, Yield and Cost • Company A maintained load factors of about 73-74% (5-6% points better than the industry average), reasonable yield and lowest labor cost (16-17% v.s. 35-37%)

  7. http://www.singaporeair.com/ca_frame.html Cargo and related operations • Cargo revenues is S$1.52 billion accounted for 21.8% of Singapore Airline's total revenue in 1998. • Cargo volumes was exceeded only by Lufthansa, Korea Airlines and Air France • Airport operations, kitchen operations and maintenance operation also contribute 13% of total revenue and 22% of total profits

  8. The Challenges • Several other airlines in the region are trying to imitate Company A’s success • The ACompany An crisis affect business volume especially travel to and from crisis affected countries • The depreciation of neighboring countries currencies has reduced Company A’s competitiveness v.s. the respective national carriers • The depreciation of the Singapore dollar would raise Company A’s fuel and aircraft procurement costs significantly • New hub in Manila, Taipei and Seoul are competing with Changi airport for air cargo volume

  9. Company Internal Marketing External Marketing Train, Motivate and retain employees Prepare Price, Distribute and promote the Service Employees Customers Interactive Marketing • Delivery the Service • People • Physical Environment • Process Three Types of Marketing in Service Industries Winning • Core Competence • Differentiated Products • Service Quality • Productivity Profit Happy Satisfied • Company Image • Symbols • Branding

  10. Strategies in Airlines Industry • Managing Differentiation • Primary Service: Transportation(passengers and cargo) Service • Safety, seating comfortable, punctuality, staff service and etc... • Secondary Service: Food, Drink, Magazine and etc.. • Managing Service Quality • A Strategy Concept, Top management Commitment, The setting of high standard, System for Monitor Service Performance, System for Satisfying complaining customers and Satisfying the employees • Managing Productivity • Reduce the operation cost • FC (84% of total cost): Labor, Fuel, Maintenance and aircraft purchase (Interest and depreciation cost about 55%) • VC (16% if total cost): Traffic (number of passengers in a particular flight) • Utilize the resources: Route, seat and aircraft arrangement

  11. Strengths The location of home base Strong management team The company benefit in line with government interests Company culture learning organization Golden balance sheet Company Image Lower labor cost Good labor relation World class employees ... Weakness Remain a company based exclusively in Singapore Lack of natural beauty in Singapore Yield lower than market leader Return on equity has been gradually shrinking 25% in 1989 to 9.4% in 1998 Company CI is not out standing SWOT Analysis - Internal

  12. Opportunities Increasing leisure travelers to and from China, South African, New Zealand, India, Australia, U.S. and Europe More business travelers to and from China, South African, U.S. and Europe Most Competitors having financial problem due to economic crisis E-commerce & Internet marketing Threats Other airlines in the region are trying to imitate Company A’s success New hubs in Manila, Taipei & Seoul are competing with Changi The ACompany An crisis affect business volume The depreciation of neighboring countries currencies and Singapore dollar Cost pressure- especially labor cost SWOT Analysis - External

  13. Customers Analysis

  14. Leisure travelers Safety Price In-fight entertainment Comfortable seat Punctuality In-flight food Flight attendant service Airport Lounge Frequent -fly plan Convenience Business travelers Safety Punctuality Schedule Comfortable seat Frequent -fly plan Airport Lounge In flight business service In-flight food Flight attendant service convenience In-fight entertainment Price What factors determine customers’choice on airline ? • Travel Agent

  15. Unit = K 89 90 91 92 93 94 95 96 97 98 Number of tourists visit Singapore from ‘89 to ‘98 1. IndoneCompany A 2. Japan 3. MalayCompany A 4. Australia 5. Taiwan ... 8. China ...

  16. Our Long Term Strategies • Continuous improvements to enhance company core competence and grow the core business • Attract more new leisure and business travelers to Company A and have different pricing strategy for two groups in order to improve the yield • Locate resources to the routes which can contribute higher load factors and yield • i.e. China, South Africa, New Zealand, India, Australia, U.S. and Europe • Make Singapore Airlines a stronger global player • Allying with the major airlines to provide wide range products to our customers and increase the sales in high growth markets • Diversify company investments to lower the risks • Assit company growth in core business • Grab the new opportunities in high growth areas

  17. Continuous improvements to enhance company core competence • Differentiate the products to avoid price competition • Invested $300 million to upgrade its in-flight servicei.e. First Class Seat, Service and Krisworld entertainment system • The largest operator of advanced version of the jumbo jet (37 747-400 in service) • Internet check-in for First Class, Raffles Class and Priority passengers flying out of Singapore, Seamless travel and E-Ticketing • Stopover campaign, Company A Hop-On bus ... • Make the quality requirements as part of company culture • Communicate the company vision and mission to internal and external customers • Provide effective training to employees of all level and form a learning organization culture • Utilize the resources to get higher load factor and yield • Maintain the youngest fleet of aircraft, Sales and lease back strategy to lower risk • Shift the capacity from the troubled routes to potential routes ….

  18. Communicate company vision to internal and external customers Vision Become the best GlobalAirlines by providing excellent Transportation Service to our customers Mission • To deliver the highest quality customers service that is safe, reliable and economical; • To adopt human resources management practices company-wide that attract, develop, motivate and retain employees who contribute to the company’s objectives; and • To maximize productivity and utilization of all resources • To generate earnings that provide sufficient resources for investment and satisfactory returns to shareholders.

  19. Marketing Strategies in Company A • Company Image • Young & Reliable • Krisworld, free drink, free ear phone • ... • #1 Awards,Winning Ways Award • B747-400, Project Rainbow, Route • arrangement Company A • Training • Labor relation • Joining decision making • Incentive program • Corporate Newsletter • Employee feedback • Stopover campaign • Company A Hop-On bus • Singapore Girls • Advertisement • A New Company CI • Customer Feedback Profit = F(load factor, the Yield,the cost) Flight attendants Ground staff ... Leisure travelers Business travelers • Delivery the Service • Recruiting right employees • $300 million upgrade its in-fight service • Seamless travel, E-ticking, Internet Check-in ...

  20. Make Singapore Airlines a stronger global player - Alliances Company A teamed up with Lufthansa, SAS, Air New Zealand, Ansett of Australia, South African Airways and Air Canadato offer : • a greatly expanded network • wider frequent flyer program benefits • seamless travel • access to lounges in more destinations • joint products , such as the trilateral "Escapade" ticket with Ansett and Air New Zealand http://www.singaporeair.com./al_frame.html

  21. Diversify the investments to lower the risks • Investment in chosen Airlines to bolster company alliances strategy and transform the corporation into a group of global airlines • i.e. Delta, Swissair, China Airlines, South African Airways ... • Investment in new hubs to help company cargo and passenger business • i.e. Taiwan, Hong Kong, Malina, Shanghai ... • Investment in company subsidiaries which can provide higher growth rate and profit margin • i.e. Join venture with Pratt & Whitney, Invested in 11 companies in ACompany A Airport,aircraft maintenance operations in China, Hong Kong and Taiwan ...

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