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Singapore Airlines is one of the key players globally within the airline industry. It has employed a set of core strategies which seek to combine excellent customer service with high rates of profitability. Using the SWOT analysis tool defined by Jobber (2001) it is a useful task to look at SIA's competitive strengths that contribute to increasing shareholders value. As mentioned above the high quality of its customer service is one of the strengths of SIA and its brand image of ‘Singapore Girl' is one which is highly recognizable by global customers. Of concern however is that maintaining quality of service at profitable levels has become increasingly difficult bearing in mind the threats faced by SIA in both macro and micro environmental contexts. In considering these threats this report uses a PESTEL analytical framework to illustrate those factors of relevance to SIA competitive capabilities and profitability.
Examples of these threats include the fact that fuel prices have consistently increased and will do so into the future while price wars between airline companies have become ever more intensive due to increased competitive levels in the industry. This is due to existing rivalries as well as new entrants within the discount airline market segment. In contrast to its rivals SIA has preferred policies of adding extra value through customer service rather than ones of pure discounts on prices, (Thompson, 2005). Similarly investment in technology such as the development of an e-ticket system enhanced its strength in terms of cost effective sales and billing systems. These developments have been supported by skilled management and governance procedures which have generally resulted in SIA enjoying a strong financial framework benefiting from previous successful operations.
In addition as Porter (1980) suggests competitive forces such as rival, consumer and supplier power, new entrants as well as substitutes greatly impact on a company's competitive