Student name: Xia Zi Wen
Course: Advanced Diploma
Module: corporate strategy
In this essay, I am going to analyse the state of the market and prospects for the Singapore airline industry, especially on Singapore Airline, by using PESTLE tool. 1.1 Background
Singapore Airline’s history can be tracked down to 1st May 1947, and more new aircraft were added to Singapore Airline (Malaysia-Singapore Airline) in the 1950s to 1960s, and in 1969, the Airline purchased five B737-100s. Finally in 1972, MSA split to become two new entities- Singapore Airline and Malaysia Airline System. And in 1977, Singapore moved its airport to Changi Airport, that was the big event at the time. In 1989, Singapore Airline became the first airline to operate a B747-400 on a commercial flight across the Pacific. Singapore Airlines commenced operations from the new terminal 2 at Singapore Changi Airport on 22ed November 1990. In September 1998, SA set new standards in air travel by unveiling a new suite of products and services worth S$500 million all the three classes of travel. When SA step into 2000s, in February 2004, Singapore Airline made a record for the world’s longest non-stop commercial flight from Singapore to Los Angeles. And Singapore Airline broke the record just month later by a non-stop flight from Singapore to New York. (Singaporeair.com)
2.0 PESTLE Analysing
In this chapter, I am going to analyse the state of the market and prospects for the Singapore Airline, by using PESTLE tool. And I will present it for each specific point. Nowadays, the environment and companies have more and more relations than ever, even the smallest change in the external situation can affect the business badly. Therefore, it is extremely important to analyse the macro environment, it has already became a part of the business. The challenges from external environment can basically summarise as political factors, economic factors, social factors, technology factors, environment factors and legal factors.
3.2 PESTLE Analysing
3.3.1 Political Factors
Political factors refers to governmental policies such as how much does the government support, and what kind of goods and services that government want to provide to its customers. The situation that in Singapore is quite fine, Singapore is a country that quite open to the enterprise, and also the policy to local company is consider as protective. And the government is trying its best to make sure that all the firms can run the best in Singapore included the international firms. Moreover, Singapore Airline’s major shareholder is actually the Singapore Government. Therefore, there is tremendous support received from the tax to the fuel policies. Even better, in order to avoid monopolising, government gave certain challenges for Singapore Airline, the deregulation of airline industry; it gives the right to other airline companies to entry the market with a lower price, to satisfy the needs of customers. (Sikorski, 1995) Also, the changes in international political landscape made political pressure among the state-owned airlines which compete for the market share. Recently, the North-Korea’s nuclear bomb testing, middle-east problem, and the fight between India and Pakistan, and those protest happened in China and Japan for Diaoyu Island are the factors that may affect the business. 3.3.2 Economic Factors
A healthy economic environment plays a big part in any business, especially the exchange rates, tax rates or if the country is suffering from economy crisis, these factors affect meaningfully on customer’s desire, but also make changes between suppliers and other relevant partner all over the world of Singapore Airline. Just like last time when the fuel cost was rising, all the airline industries around world were having a tough time, as well as the Singapore Airline. The...