Airline Business Environment in Asia

Topics: Singapore Airlines, Airline, Low-cost carrier Pages: 9 (3080 words) Published: August 21, 2008
Singapore Airlines is one of the world's leading carriers with an advanced fleet and it is internationally respected as the innovative market leader combining a quality product with excellent service .Being a international company in the competitive International business environment ,it has to face a number of competitions ,challenges ,changing environmental trends and options .To deal with these issues ,SIA pursue a number of management strategies while maintaining it’s key resources and secret of success. This report will analyse the Singapore Airline’s corporate strategy ,business environment ,key resources,key success factors and issues facing by the company.

Airline Business environment in Asia-Pacific
According to Asia Pacific Aviation Summit in February,2006, at the macro-economic level Asia Pacific growth is impressive and it is assume that the strong economic growth will continue in the future. Along with the economic growth ,the demand for airline industry in Asia-Pacific region increased. Especially for countries with strong economy like Australia ,Singapore ,China ,Thailand ,Japan and India ,the demand for the airline industry is very high and they expand their horizons to many part of the world . But other small countries with low economy like Burma ,Laos and Bangladesh can’t expand their horizons as the demand for their airline industry is low .So they just go to neighbouring countries .However ,the competition of airline business in Asia-Pacific region is still high as this region is the home of world major airlines such as Singapore Airlines (SIA) ,Thai Airways International ,Qantas etc.

In the past ,the airline business environment in Asia-Pacific region was affected by so many crisis such as 9/11 attack ,SARS crisis ,the threat of war in Iraq and Avian Flu crisis and so on .Among the regions around the world which suffer from 9/11 crisis ,the recovery of Asia-Pacific region is the strongest. For SIA ,although it suffered from economic hardship and reduced loads,it has remained profitable because of its geographic location limited reliance on routes into the U.S..Moreover,The opportunities to merge with the existing trans-Atlantic carriers have improved for international Airlines such as SIA after 9/11 attack.(Hill et al,2004)

There are many other environmental trends that are currently affect and those which are likely to significantly affect the companies from Asia-Pacific region in the future.The first one is the high price of fuel .In two years the industry fuel bill more than doubled to nearly US$100 billion—23% of operating costs. (IATA:2008) The another major challenge in the region is low cost carrier competition .Budget Airlines such as Air Asia ,Virgin blue, Jetstar Asia and others offer low-cost flying and it becomes a serious threat to many traditional airlines such as SIA since the high cost structure of full-service carriers prevents them from competing effectively on price - the most important factor among most consumers when selecting a carrier.

The Airline Industry structure and the basic for competition (particularly in Southeast Asia) Today Airline industry in Southeast Asia is full of competition as this region is the home to world’s major airlines such as SIA ,Thai Airways International and Air China and so on.The competition among airlines are tough and aggressive.Moreover,the low-cost carrier become popular in this region and the market become crowed with low-cost carrier competitions.Among them Air Asia ,the budget airline from Malaysia is the cheapest 2.5 US cents per ATK .In 2004,Qantas operates the low-cost Airline ,Jetstar Asia to expand its horizon to Southeast Asia’s crowded low-cost carrier industry.To beat the competition with these low-cost carriers in Southeast Asia market ,SIA operates the Tiger Airways which offer low fares in exchange for eliminating many traditional...
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