Sia Case Study
Singapore Airlines by Lau Geok Theng with the assistance of Leong Wai Yee
In September 2010, senior executives of Singapore Airlines (SIA) were wondering what strategic thrusts they should adopt over the next ten years in order to remain competitive and profitable. The company had just announced increases in fares averaging S$200 (US$148) more for economy seats and S$1,000 (US$743) more for premium seats, given the improved economic climate and increased air passenger counts in recent months. The company had also announced that Mr Goh Choon Phong would take over as Chief Executive Officer in January 2011 when the current CEO, Mr Chew Choon Seng retires in December 2010. Mr Goh had been with the company since 1990 and had held various senior positions including Director of Singapore Airlines Cargo and Senior VP of Finance. The airline industry was not an easy one to survive in, as the performance of companies was highly reliant on factors often beyond their control. Other than regulations imposed by governments, airlines were buffeted by external influences such as economic climates, disease outbreaks, natural disasters, and changes in oil prices. Relative to competitors in the industry, Singapore Airlines (SIA) had outstanding performance so far, evidenced by the numerous awards and titles that it had achieved. SIA faced strategic dilemmas regarding which path to take – a path of continuity or a path of change? Company History The history of the SIA group dated back to 1937 when Malayan Airways Limited was registered, although flight operations really began ten years later. On 1 May 1947, a twin-engine Airspeed Consul took off from Singapore Kallang Airport on the inaugural flight for the services that were to be operated between Singapore, Kuala Lumpur, Ipoh and Penang (the latter three are cities in Malaysia). In 1963, with the emergence of the new Federation of Malaysia, the airline was renamed Malaysian Airways Limited. In 1965, following Singapore’s
In September 2010, senior executives of Singapore Airlines (SIA) were wondering what strategic thrusts they should adopt over the next ten years in order to remain competitive and profitable. The company had just announced increases in fares averaging S$200 (US$148) more for economy seats and S$1,000 (US$743) more for premium seats, given the improved economic climate and increased air passenger counts in recent months. The company had also announced that Mr Goh Choon Phong would take over as Chief Executive Officer in January 2011 when the current CEO, Mr Chew Choon Seng retires in December 2010. Mr Goh had been with the company since 1990 and had held various senior positions including Director of Singapore Airlines Cargo and Senior VP of Finance. The airline industry was not an easy one to survive in, as the performance of companies was highly reliant on factors often beyond their control. Other than regulations imposed by governments, airlines were buffeted by external influences such as economic climates, disease outbreaks, natural disasters, and changes in oil prices. Relative to competitors in the industry, Singapore Airlines (SIA) had outstanding performance so far, evidenced by the numerous awards and titles that it had achieved. SIA faced strategic dilemmas regarding which path to take – a path of continuity or a path of change? Company History The history of the SIA group dated back to 1937 when Malayan Airways Limited was registered, although flight operations really began ten years later. On 1 May 1947, a twin-engine Airspeed Consul took off from Singapore Kallang Airport on the inaugural flight for the services that were to be operated between Singapore, Kuala Lumpur, Ipoh and Penang (the latter three are cities in Malaysia). In 1963, with the emergence of the new Federation of Malaysia, the airline was renamed Malaysian Airways Limited. In 1965, following Singapore’s
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