How management helps SIA to become a great airline

Profitable every year since the beginning, Singapore Airlines (SIA) is frequently ranked as world’s top airlines and has won uncountable international awards for high class flight quality and service. No one can deny the contribution of its management. 1. Clarity and Commitment. SIA’s mission statement and core values establish quality service is a fundamental objective and aspiration of the airline. 2. Continuous Training. To meet the increasing customer expectation, four training centers within the company (Cabin Crew, Flight Operations, Commercial and management Development) are functioning.

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3. Connection with Customers. SIA makes a concerted effort to stay in touch with customers through in-flight surveys. 4. Internal Communications. In the pilot pool alone there are more than 25 countries are represented! To keep everyone on the same wavelength, SIA publishes a variety of department newsletters and a monthly company-wide magazine. 5. Consistent External Communications. The legendary “SIA Girl” is always featured in the advertising layouts and copy, because the “SIA Girl” is the brand identity – the public personification of that service.

Every organization no matter small or big faces its environment, in which it functions. There are two categories, one is specific environment, and the other is general environment. Here we focus on specific environment in the case of SIA. Five components constitute specific environment: suppliers, customers, competitors, government and pressure groups. As far as SIA is concerned, it mainly refers to the former three factors. Let’s discuss them in turn. Suppliers Suppliers are an important link in the company’s overall customer value delivery system.

They provide resources needed by the company to produce its goods and services. However, in the case of SIA, the suppliers are mainly Boeing and airbus. Singapore Airlines was committed to its order for five of Airbus’ new longer range A340-500 jet, which was scheduled to be introduced in 2002 and will be able to fly nonstop from New York to Singapore. But many analysts now say that Boeing might trump Airbus again with a new, long-range 777 that it is expected to announce later this year.

The management should ensure a steady flow of inputs at a low price possible, because these inputs carry some uncertain factors. For example, management should watch supply availability, labor strikes, and other events that can cost sales in the short run and damage customer satisfaction and confidence in the long run. Moreover, as airline is a special industry, SIA should ensure the effective maintenance service that the suppliers provide regularly. On the other hand, money has never been a problem since the profitability of SIA, unlike the other airlines, United Airline or Malaysia Airlines for example.

Customers SIA gets customer service right so many times that it is the most famous provider of high-quality service in the entire airline industry. A dedicated service culture succeeds because it breeds enviable customer loyalty and because it is so difficult for a rival to replicate. SIA offers three different classes: economic, business, first class. They differentiate the segments and offer different services. SIA mainly deals with consumer markets (consist of individuals and households that buy the services for personal consumption).

To do well, SIA makes a concerted effort to stay in touch with customers through in-flight surveys. Frequent flyers are especially well connected with special messages, offers and publications sent regularly to members of the priority passenger “PPS Club”. Very frequent flyers achieve an elite “Solitaire” status, with a wide range of valuable privileges, including most convenient check-in, additional baggage allowance, priority seating and waitlist and more. Competitors A firm wants to be successful, must be able to provide greater customer value and satisfaction than its competitors do.

Customers of SIA simply want the core benefit of a flight. The management should do more than that; they should develop strategic advantages by positioning their offerings strongly against competitors’ offerings in the minds of consumers. SIA is large in range, but recently many new competitors have come and started competing with SIA. It faces the emergence of low-cost carriers in the region and challenges to Changi Airport’s position as a regional aviation hub. Three key challenges facing the airline in the long term are outlined as follows: * Its competitors are catching up.

Though SIA is still running far ahead, people are noticing that the competitors are growing very fast (the growth rate is higher than SIA’s). While SIA continues to lead the competition in many areas, they are not far behind. Therefore, SIA must find solutions to help it cope with the situation trying to leave competitors far behind, hoping the introduction of seats which can be converted into beds will help keep the airline ahead. * Rise of other airports to rival Changi as a regional hub. Because of the interdependent relationship between SIA and Changi airport, SIA should try to maintain Changi airport’ competitiveness as well.

Very recently, SIA announced that they are planning for low-cost airlines. For example, no-frills airlines Ryan Air and Easy jet on major European carriers.  Safety issue. Whatever luxurious service SIA provides, as far as flight is concerned, the thing that customers care the most is the safety issue. Nothing is more important than life. The airline’s first ever crash in Taiwan two years ago was a “rude awakening” which compelled the carrier to re-examine all aspects of flight operations, such as safety and training. In this case, SIA may still outperform its competitors.