The report provides an overview of the company and its environment. The paper identifies various resources and capabilities available to the company. The various strategies that Singapore Airlines utilise and how they affect the airlines performance. Key issues have been identified that threaten Singapore Airlines current market. The often complicated Government regulations and global laws that affect the airline industry have been defined and explained. Current industry issues and trends that affect Singapore Airlines have been researched, a number of recommendations have been provided, as a possible solution.
Overview of Singapore Airlines
Singapore Airlines (SIA) first flights began in 1947 partnered with Malaysian Airlines, each funded by there governments. The two airlines mainly serviced South East Asia. Singapore separated from Malaysia in 1965 to become the republic of Singapore. The two governments therefore decided to go there own ways and set up there own airlines. In 1972 Singapore Airlines was launched.
The domestic market was basically non existent due to Singapore being a small country geographically. Singapore Airlines had to immediately pursue an international presence and started planning flight routes, airport resources, and government acceptance into foreign destinations etc. SIA also had to establish themselves as a genuine competitor and market the airline internationally to potential customers and future stakeholders. Today, SIA has more than 10,000 employees and 95 aircrafts. The airline now serves 89 destinations around the world including Asia, Europe, North America, Middle East, Australasia, and Africa. ( www.airlines.priceline.com) SIA is situated at Changi Airport along with subsidiaries Silkair and Tiger Airlines. ‘In 2004, Changi Airport received a record 30,400,000 passengers, a year-on-year growth of 23.1% in passenger traffic. Similarly, a record 1,780,000 tonnes of cargo was moved, representing a year-on-year increase of 10.2% in airfreight volume’. (http://en.wikipedia.org). Changi Airport is classed as “the hub of Asia”, Changi provides stopovers, refuelling, and passenger exchange for all the international airlines travelling from one side of the world to the other. Changi Airport is also expanding to accommodate for there cut price airline and new Airbuses arriving in 2006.
Analysis of Singapore Airlines Environment
In analysing the environment, the important external influences that effect performance and decisions of Singapore airlines have been detailed in this section. The airline industry has been strongly controlled by agreements and policies. Airlines couldn’t just fly to any destination or country without appropriate authorisation. Most countries have there own national airline that are generally government backed and hold a big influence on there operation. The governments also implement policies and regulations to control foreign airline access to there airports. Some countries now have deregulated there national airline industry to reduce the amount of government control, and make access to airports/services more open for negotiation. Countries that have employed this action are the United States, Australia, European Union and Japan. The deregulation of the Airline industry opens doors for more entrants to the market and increased competition. Singapore Airlines is still owned by the Singapore government and is still affected by such controls. The Singapore government has signed an agreement with the United States called “Open Skies” that gives both countries unrestricted flight access to each others countries. The open skies phenomenon is gathering momentum and more and more countries are signing up. Singapore Airlines is currently in negotiations with Australia, to reach an agreement regarding open skies access down under. Basically the countries that gain open skies agreements are able to expand on existing business. The airline...