SIA ASSIGNMENT

Introduction.

Stephen Lee Yen – Chairman (Executive over SIA Engineering)

Singapore Airlines (SIA) is widely regarded by those in the airlines industry, travelers as well as its competitors, as one of the very best airlines in the world. [1] The company, with a network spanning five continents, is known for its young fleet and excellent customer service. Its uncompromising approach to safety and security, ethical practice of business, commitment to be a good corporate citizen embracing responsible governance, and dedication to profitable returns to shareholders are SIA's core values. The Singapore Girl brand is an internationally-renowned symbol of quality service, and she is regarded as an excellent representative of the country.















Turbulence on the horizon

Competitive conditions in the airline industry are becoming more challenging. Apart from wildly fluctuating fuel prices and security concerns, another wildcard for many airlines is the risk of long range aircraft by-passing their hubs. The Boeing 777-200LR launched in 2005, for example, is capable of flying 17,500 km, almost half way around the world. These planes can allow airlines to by-pass hubs like Singapore on flights from Europe to Australia for example. SIA has been seeking rights to fly from Australia to Europe and from Australia to the US as a way of mitigating this risk.

Competitors are hot on SIA's heels, trying to close the gap in both service excellence and efficiency. This is not always easy to do; Malaysian Airlines' service quality is high for example, but its efficiency is nowhere near SIA's (available tonne–kms per
Employee is 355 thousand, around just one third of SIA's) (Doganis, 2006). Other competitors have embarked on aggressive growth while also competing on service quality. For example, Emirates has placed successive orders for 45 A380 aircraft (at a cost of about $19b), and prices tickets at levels generally lower than its main competitors.



Diagram for Boeing 777-200LR


Diagram for Jet Fuel and cruel oil.
























1.3 Defining success

Corporate success is the measure of an organisation's competiveness, long-term profitability, customer satisfaction and continuance of the organisation (Fritz, 1992). This supported by Kanter (2011), who describes success as the organisation's ability to meet both shareholder and stakeholder goals


1.4. Measurement of success

Success should be considered at various levels of competition (Kotler, 1969). However, this analysis focuses only on brand level. Not all financial indicators are independent of non-financial indicators as financial results may be linked to "cost-centre- type" actions (Maoboussin, 2012) such as customer service.



1.5Achieving Service Excellence Cost-Effectively
SIA has two main assets—planes and people—and it manages them so that its service is better than rivals' and its costs are lower. Unlike other airlines, SIA ensures that its fleet is always young. For instance, in 2009, its aircraft were 74 months old, on average—less than half the industry average of 160 months. This triggers a virtuous cycle: Because mechanical failures are rare, fewer takeoffs are delayed, more arrivals are on time, and fewer flights are canceled. New planes are more fuel efficient and need less repair and maintenance: In 2008, repairs accounted for 4% of SIA's total costs compared with 5.9% for United Air Lines and 4.8% for American Airlines. SIA's aircraft spend less time in hangars—which mean more time in the air: 13 hours, on average, per day versus the industry average of 11.3 hours. And, of course, customers like newer planes better.
Service is mostly about people, so SIA invests heavily in training employees. It schools its fresh recruits for four months—twice as long as the industry average of eight weeks—and spends around $70 million a year to put each of its 14,500 employees through 110 hours of retraining annually. The training includes courses on deportment, etiquette, wine appreciation, and cultural sensitivity. SIA's cabin crews are trained to interact with Japanese, Chinese, and American passengers in different ways. Trainees learn to appreciate subtle issues, such as communicating at eye level rather than "talking down" to passengers. The superior service that results not only delights customers but also reduces costs by minimizing customer turnover.
SIA's training program focuses as much on the necessity of keeping costs down as on the delivery of great service. Trainers, usually former senior crew members or external experts, discuss the airline industry's fiercely competitive nature with employees every year. At town hall–style meetings and in internal communications, senior executives stress the fact that SIA must become more efficient in order to remain competitive. They emphasize both parts of the company's vision: providing air transportation services of the highest quality and maximizing returns for the benefit of shareholders and employees.